ProPhotonix Limited (LON:PPIX) (OTC:STKR) shares plunged on Friday after the technology firm warned it will post a net loss of around US$2mln for full-year 2018 after a slowdown in the second half in part due to revenue declines from two key customers, with the group calling trading conditions “positive but challenging.”
In early morning trading, ProPhotonix was the biggest casualty on the London market, down 37.5% at 3.75p.
In a trading update, the AIM-listed designer and manufacturer of LED illumination systems and laser diode modules said it expects group revenue for the year ending 31 December 2018 to total approximately US$16.0mln, down from US$17.7mln in 2017.
READ: ProPhotonix shares plunge on declining profits and margins
The group added that it now expects this forecast revenue will result in a net loss for 2018 of approximately US$2.0mln and an adjusted loss (adjusted EBITDA) of approximately US$0.5mln.
It said one of the key customers delayed the launch of its next-generation product, which incorporates components manufactured by ProPhotonix and, as a result, revenue from that customer is expected to decline by 26% year-on-year. The firm said it now expects that the customer's next-generation product will launch in the first quarter of 2019.
Separately, the company, added, revenue from another large customer is expected to fall by 46% year-on-year due to an excess of components supplied by ProPhotonix in the customer's inventory, which is expected to be consumed over the fourth quarter of 2018.
Finally, ProPhotonix said, new products recently introduced to the market have taken longer than anticipated to gain market traction contributing to the current revenue expectation.
However, the group said its total order book for future shipments stands at US$7.2mln as of 31 October 2018.
Tim Losik, the group’s CEO, commented: "While the expected 2018 results are a disappointment for ProPhotonix, especially considering the significant momentum and improvement since the Group was recapitalized in 2013, our order book remains strong and we remain optimistic about the future of the business as we build our OEM partnerships along with a comprehensive portfolio of products.”
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