Subsea engineering group Tekmar has been forced to rollback its hopes of “record” revenues in 2020 due to the effects of the coronavirus.
The group said the “unpredictable and rapid” effects of the outbreak have affected its business in Asia, which has accounted for a large chunk of recent growth.
Tekmar said its office in Shanghai, which services the whole of the Asia Pacific, has been placed on official shutdown, along with many of their clients’ and suppliers’ offices in the region.
Meanwhile all the group’s projects scheduled for shipment to China have been delayed due to travel restrictions and the supply of components from the country have also been ceased.
China accounted for around 10% of Tekmar’s revenue forecast for the 2020 financial year, representing 20% of its outstanding supply-chain commitments.
As a result, the firm no longer expects “record revenues” for 2020 as predicted in its half-year results published in December, and instead expects results “broadly in line” with 2019.
Last year the firm reported pre-tax profits of £2million on revenues of £28m, both up significantly on 2018’s results.
Increased costs relating to one project within its Subsea Innovation branch are also expected to impact the 2020 figures to a lesser extent.
The firm said it fully supports China’s efforts being taken to contain the virus, describing them as “necessary and prudent”.
Chairman Alasdair MacDonald said: “The disruption caused by the outbreak of the coronavirus on the Group’s activities and performance has been unpredictable and rapid, impacting the Group materially in our crucial, heavily weighted Q4 period.
“With the situation in China and the surrounding APAC countries evolving, we are not yet able to evaluate the full impact of the virus on FY21 and will provide further updates as necessary.”
Tekmar Group is based in Newton Aycliffe with a series of engineering and subsea subsidiaries that serve the offshore wind and oil and gas markets.
It’s Pipeshield business has a manufacturing base near Aberdeen, while Agiletek, based in London, attributed recent growth due to increasing its “presence in Aberdeen, the Middle East and the Far East, including Malaysia and Taiwan”.