LED maker Dialight warns on annual profit, shares slump (updated)
19/11/2019 08:13
(Adds details on outlook, Sanmina partnership, shares)
Nov 19 (Reuters) - Lights manufacturer Dialight Plc DIAL.L
on Tuesday warned of possibly lower annual operating profit, as
the drawn-out trade spat between the United States and China is
leading to uncertainty around the timing of orders from its
customers.
The LED lights maker's shares were down about 20% on the
warning.
The company has faced numerous challenges this year
including high costs related to a former manufacturing
partnership that went sour. The chief executive officer and
chairman were also replaced.
Dialight now expects its 2019 earnings before interest and
taxes (EBIT) to be between 5 million pounds ($6.48 million) and
8 million pounds, after adjusting for some costs. urn:newsml:reuters.com:*:nRSS8206Ta
The company reported EBIT of 8 million pounds last year and
in July said it expected to report underlying operating profit
of 10 million-13 million pounds. urn:newsml:reuters.com:*:nASP0013TW
Dialight said on Tuesday the market for its division that
supplies traffic lights remained weak and does not expect it to
recover until the second half of 2020.
"With our exposure to U.S. markets, the uncertainty of the
trading relationship with China continues to be a significant
headwind as we enter our traditionally busiest period," the
company said in a statement.
North America, which accounted for 73% of Dialight's sales
in 2018, has also been challenging for the firm due to issues
after it moved production of its designs to U.S.-listed Sanmina
Corp SANM.O .
On Tuesday, Dialight said it has been unable to reach a
settlement with Sanmina so far and was exploring all options to
recover costs related to the issue and exit the partnership.
($1 = 0.7714 pounds)
(Reporting by Pushkala Aripaka in Bengaluru; Editing by
Shailesh Kuber)
((Pushkala.A@thomsonreuters.com; Twitter: @pushkala_a; within
UK: +44 20 7542 1810, outside UK: +91 80 6749 6633;))