Lack of demand from key customer means full-year results will be worse than expected
Companies: Halosource
Shares in clean water tech company HaloSource, Inc. (LSE: HALO) plummeted in early trading as the company announced that weaker than expected performance had led to revenues being "materially" lower than expectations for the year ending 31 December.
The AIM-listed firm's share price fell 47% as the group said annual revenues would be in the range of $2-$3m and would result in the net loss for the full-year being higher than expectations.
HALO confirmed revenues from operations were negatively impacted by manufacturing stoppages at a "key customer" in China, saying that whilst these issues were eventually resolved, demand from this customer had been weaker than expected in H2.
It appears the company did take steps during the year to reduce OPEX, but clearly, the reduction in revenues has not been offset and net loss will be worse than expected.
Going forward, the Board has said it will take "proactive" steps to reduce cash burn and extend its funding position:
"... steps to reduce the cash burn rate to prolong the funding position of the Company through to at least the end of 2017.
This includes closing its production facility in India by the end of 2016, with customers in India to continue to be serviced by its Chinese facility. The impact of these steps will result in the Company's expectations for revenue for 2017 being in a range of $4 to $6 million."