February 3, 2020 / 7:53 PM / 15 days ago

Austria's AT&S cuts full-year forecast, blames coronavirus disruptions

VIENNA, Feb 3 (Reuters) - Printed circuit boards maker AT&S on Monday cut its revenue and margin forecast for the business year that ends in March, saying current production in China was affected by the spreading of the coronavirus.

AT&S produces circuit boards for smartphones and tablets and so-called inter circuit (IC) substrates — platforms onto which electronic components are applied. These IC substrates are designed for use in high-end industrial applications, medical devices and navigation systems.

The Austrian company employs nearly 7,000 staff in China, where it operates two plants in the city of Chongqing, around 900 kilometres from the city of Wuhan, where the coronavirus outbreak began, and one plant in Shanghai. It generates the majority of group revenue in the People’s Republic.

AT&S said it now expects full-year revenue to reach 960 million euros ($1.06 billion). The margin on earnings before interest, tax, depreciation and amortisation (EBITDA) would be in the range of 18% to 20%. It previously forecast a flat revenue of 1.03 billion euros ($1.14 billion) and an EBITDA margin of 20%-25%.

“Subject to staff availability, the plants in Shanghai and Chongqing II will start production in the week of 10 February 2020 after extended New Year’s holidays,” AT&S said in a statement, adding that the Chongqing I plant resumed production at reduced capacity after the New Year’s celebrations as planned.

“The objective is to resume production as soon as possible in order to process existing orders and contracts,” it said.

The death toll in China from the newly identified virus rose to 361 as of Sunday and the number of confirmed cases in China has risen above 17,000 with at least another 151 confirmed cases in other countries and regions.

Various provinces and cities in China have called for factories to halt work to help stop the spread of the coronavirus, though companies in certain industries can remain in operation while others can apply for an exemption.

Technology firms that have maintained operations to manufacture parts and products despite the government calls include Huawei Technologies and Semiconductor Manufacturing International Corp (SMIC).

AT&S said it considers a deterioration of current general conditions, the provision of production materials and personnel, processes in the supply chain, and the demand situation as the main aspects to influence development in coming months.

The group will release third quarter results on Tuesday. ($1 = 0.9041 euros) (Reporting by Kirsti Knolle; Editing by Catherine Evans)

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