Watta to cease ops of auto battery units

PETALING JAYA: Watta Holdings Bhd has decided to cease operations of lossmaking wholly owned subsidiaries Watta Battery Industries Sdn Bhd and Syarikat Perniagaan Leko Sdn Bhd as part of its reorganisation plan.

Watta’s board of directors said the rationale is to reduce operating costs and overheads of the group.

The business of manufacturing and distribution of automotive batteries has been very competitive with the influx of foreign brands, which in turn has reduced its margins to a point of not being able to cover operational costs and overheads.

A total of 29 employees will be laid off in stages and the contracts of its six contract staff will not be renewed.

“The proposed cessation will affect the financial performance of the group for the current financial year ending Dec 31, 2017, as a result of the one-off redundancy cost and impairment loss on assets to be incurred. The impact to consolidated earnings will be a cost of RM1.95 million, and in terms of earnings per share and net assets per share, a reduction of RM0.05 per share respectively,” the board said.

The revenue contribution by trading and distribution of automotive batteries amounted to 30.17% of the group’s revenue for the nine months ended June 30, 2017.

Watta will continue its existing business of servicing and trading telecommunication products, which made up 69.83% of the group’s revenue for the nine-month period.