KUALA LUMPUR (May 31): ATA IMS Bhd posted a net loss of RM29.22 million for the fourth quarter ended March 31, 2022 (4QFY22), compared with a net profit of RM26.94 million a year earlier, following the termination of its contracts with Dyson.

Revenue dropped 55.47% to RM431.06 million from RM967.98 million as the termination of contracts by the major customer resulted in underutilisation of production capacity and impairment of assets.

For the full financial year, ATA IMS posted a net loss of RM11.48 million compared with a net profit of RM150.3 million for the previous financial year, while revenue slipped 38.36% to RM2.6 billion from RM4.2 billion.

ATA IMS estimated the turnover for the current financial year ending March 31, 2023 to fall by about 60% due to the global economic uncertainties, besides the Dyson contracts' termination.

The group was embroiled in forced labour allegations last year, and its contracts with Dyson — which made up 80% of its revenue — were scheduled for termination from June 1 onwards.

ATA IMS said the group will continue to undertake cost-cutting measures in response to the termination of contracts, and work towards downsizing to maintain profitability and to ensure sustainability.

The measures taken thus far include the resale of excess stocks.

"In accordance with the contract with customers, all stocks for customers are to be purchased back by customers where discussions with customers are taking place to ensure all stocks can be cleared in the next one to two months," it added.

In addition to that, ATA IMS said the management has identified 10 factories or warehouses to be discontinued, and is in talks with the landlords to return the properties before the expiry of the tenancy agreements.

The group said it is also reducing production capacity by selling excess plants and machinery.

"With the existing business and potential new customers, the management is optimistic that the group will return to reasonable profitability in the new financial year," it added.

ATA IMS' share price finished 4.35% or one-and-a-half sen lower at 33 sen, bringing a market capitalisation of RM397.44 million.