- We estimate that AEM (SGX:AWX) will need to reflect S$25.1m higher cost of goods sold (COGS) for FY23F, leading to a net loss of S$12.2m for the financial year.
Overstated inventories
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- Preliminary estimates by AEM suggest that the group’s inventories could be between 5% and 7% lower than the Sep 2023 figure of S$358.6m.
- AEM attributed the shortfall to data entry errors that were not detected by the existing controls and processes in place during the migration of production to the Penang facility from Singapore.
Operational impact
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- AEM’s business with customers will not be negatively impacted as requisite inventories to fulfill customers’ orders are intact, the company said.
- AEM’s Vice President of Engineering (appointed 1 Feb 2018) is currently managing the operations and AEM will provide further updates when it releases its FY23F results.
Financial impact
- Read more at SGinvestors.io.
