OSLO, Norway, Sept. 22, 2021 /PRNewswire/ -- Asetek today
provides an update on the company's full year 2021 expectations,
triggered by the effects of new and ongoing Covid-19 shut-downs in
China disrupting Asetek'supply
chain. The update also reflects wider supply chain challenges and
non-recurring costs related to a sharpening of Asetek's Data center
segment to improve profitability.
Asetek's operations have been affected by shut down in the
Tongan District in China,
hindering sub-suppliers' deliveries of components, and a
challenging Covid-19 situation in Xiamen, hindering deliveries of components to
Asetek's contract manufacturers and consequently their shipments to
Asetek.
In addition to the new Covid-19 effects in China, continued components shortages and
increasing logistics costs are affecting both Asetek and the
company's customers and partners, leading to increased uncertainty
related to sales and costs for the remainder of the year.
Coinciding with the Covid-19 effects in China and the wider supply chain challenges,
Asetek has decided to sharpen its Data center business segment and
exit the High Performing Computing (HPC) niche. The decision was
taken to protect Asetek's future profitability from increasing HPC
investment needs, lacking revenue from the HPC area and an upcoming
milestone with an external HPC partner involving binding
commitments. Asetek will prioritize the general data center market
and support legislation increasing adoption of the company's
sustainable data center solutions, capitalizing on the company's
liquid cooling technology and long-term investments in the Data
center business segment.
On August 12, Asetek announced its
second quarter report with full year 2021 expectations including
revenue growth of 20-30% compared with 2020 and an operating income
of $8-12 million.
Based on the current situation and outlook, Asetek's updated
full year 2021 expectations are:
*Group revenue growth of 10-20% compared with 2020
*Operating income between $0-2
million compared with $11 million in
2020
The reduced operating income expectation is explained by reduced
sales due to China lock-downs,
increased shipping and component costs, as well as non-recurring
costs of $2.5 million associated with
the sharpening of the Data center segment by exiting the HPC
niche.
"The shut-downs, component shortages and shipping bottle necks
are challenging the supply chains of both Asetek and our customers.
This impacts our revenue and cost expectations. We have highlighted
the risk related to Covid-19 and component shortages over time. As
the situation now unfolds, we will adapt to the current
environment, reduce spending and focus on delivering on the strong
underlying demand we have experienced over time" Andre Sloth
Eriksen, the CEO of Asetek says.
"Asetek has a clear strategy of profitable growth. Since our HPC
area continue to burn cash and don't materialize meaningful
returns, we decided to exit HPC. We maintain our long-term
dedication and exposure to sustainable data centers with a focused
approach, while improving our shorter-term profitability. The time
was right to make a decision since we were facing a milestone with
an external HPC partner involving binding commitments" Andre Sloth
Eriksen adds.
Asetek will hold an investor conference call later today and
will provide additional comments then and not before that. The
company will report its third quarter results on October 28, 2021. Today's update is based on new
and currently available information, and the company will provide
further updates on its business and outlook via interim reporting
and other disclosure when relevant.
Investor conference call today Wednesday, September 22, 2021 at 4:30 PM CEST
CEO André Sloth Eriksen, COO John
Hamill and CFO Peter Dam
Madsen will hold a conference call and Q&A related to
the updated full year 2021 expectations at 4:30 PM CEST today.
The conference call and Q&A session can be accessed by using
the following link: https://streams.eventcdn.net/asetek/fy2021
CONTACT:
Peter Dam Madsen
Chief Financial Officer
Asetek
Assensvej 2, 9220 Aalborg East, Denmark
Mobile: +45 20 80 72 00
About Asetek
Asetek, the creator of the all-in-one liquid cooler, is the
global leader for liquid cooling solutions for high performance
gaming and enthusiast PCs, and environmentally aware data centers.
Founded in 2000, Asetek is headquartered in Denmark and has operations in China, Taiwan
and the United States. Asetek is
listed on the Oslo Stock Exchange (ASTK.OL).
This information is subject to the disclosure requirements
pursuant to Section 5-12 of the Norwegian Securities Trading Act.
This stock exchange release was published by Peter Dam Madsen, CFO at Asetek A/S, on
September 22, 2021 at 12:45 CEST
This information was brought to you by Cision
http://news.cision.com
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SOURCE Asetek