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Be the first with the news that moves the market- Supply chain solutions company, Celestica (TSX:CLS) has seen its first quarter revenue drop 8 per cent, due to COVID-19
- During the quarter, the company saw its orders fall by around $85 million
- Furthermore, the pandemic has caused supply chain issues with suppliers, which Celestica expects to extend into the near-term
- The company is operating with a workforce reduced by 15 per cent, due to government measures to stem COVID-19’s spread
- Celestica (CLS) is up 14.94 per cent, with shares trading for $8.31 and a market cap of $1.07 billion
Supply chain solutions company, Celestica (TSX:CLS) has seen its first quarter report significantly impacted by the COVID-19 pandemic.
Revenue in the quarter was down 8 per cent to C$1.32 billion, when compared to the same quarter in 2019.
This resulted in a net earning loss of $3.2 million for the quarter, compared to $90.3 million profit in 2019’s corresponding period.
The pandemic has interfered with Celestica’s normal operations in a number of ways. Firstly, the virus has contracted the company’s supply chain. Celestica expects suppliers to remain overstretched in the coming quarters.
To help offset the impact to its operations, Celestica has stockpiled materials in case they become harder to acquire later on in 2020.
Secondly, the company saw orders fall by around $85 million, due to the general economic downturn that accompanied COVID-19.
Celestica expects orders to increase to normal operating levels, once the pandemic’s effects subside.
Lastly, the company has seen around a 15 per cent reduction in its workforce, due to governmental measures to limit COVID-19’s spread. This has materially affected the company’s performance.
However, the company has assured shareholders that the vast majority of its operations remain operating and are deemed essential.
President and CEO of Celestica, Rob Mionis, remains confident about the company’s performance in the face of current industry challenges.
“In the first quarter, Celestica achieved improved year-over-year non-IFRS operating margin and segment margins, generated robust free cash flow, and paid down long-term debt.
“Although revenue came in lower than originally expected due to the challenging environment created by COVID-19, these metrics reflect our team’s impressive performance through adversity,” he said.
Celestica (CLS) is up 14.94 per cent, with shares trading for $8.31 at 2:37pm EST.
