Considering the current developments regarding COVID-19 globally and in the Baltic states, in response to declaration of emergency situation introduced by March 12, 2020 Cabinet of Ministers of Latvian Republic Order No.103 On the Declaration of Emergency Situation (Latvian Republic Official Journal “Latvijas Vēstnesis”, 2020, No. 51A, 52A, 52B, 54A) and following amendements thereof, with this announcement HansaMatrix informs about the current business situation of the Company, the actions that the Company is undertaking, and the potential COVID-19 business impact.

The current business situation of the Company:

HansaMatrix top priority is safety and security of its employees and continuation of the operations during COVID-19 emergency situation period. As per today among company employees there are no infection cases. All business units operate at the available capacity.

HansaMatrix has a diversified supplier base. The Company has been in contact and discussed the developing COVID-19 situation with the key suppliers and logistics partners, all of which, located in the affected countires, are continuing the operations and are taking the virus spread and contraction precautionary measures. The electronic component supply chain disruptions due to coronavirus are expected to impact HansaMatrix manufacturing order execution, potentially shifting fulfillment times, and could increase component sourcing costs.

HansaMatrix continues to work closely with customers to better identify and understand the potential impact the COVID-19 situation may have on the manufacturing order book. Customers, located in the affected countries, are continuing the operations and are taking the virus spread and contraction precautionary measures. The manufacturing order volume can be influenced by potential decisions by businesses to postpone investments and by consumers to decrease expenditures and also by international travel restrictions preventing customers from promptly accepting the executed orders, which potentially can be mitigated by online solutions.

Response actions:

In response to emergency situation HansaMatrix has introduced internal code of emergency aimed to ensure safeguarding and maintaining good health of the employees in the Company. New internal regulations and business practices have been introduced.

As a result of management effort all business units of the Company, including Pārogre and Ventspils manufacturing plants, metal parts and optics product unit in Mārupe and head office in Mārupe are fully operational. HansaMatrix ensures safe working condition to workers present at all plants and offices of the Company and ensures remote work from home for employees where it is possible, effective and necessary. All requirements of self-isolation and quarantine stipulated by law are supported and enforced when necessary.

Potential business impact:

HansaMatrix remains confident in the Company long-term prospects and growth strategy. However current international travel restrictions, large-scale quarantines and social-distancing measures, implemented by many countries in Europe and worldwide could drive fall in business and consumer spending until the end of 2020 Q2, potentially impacting business volumes in 2020 Q3 as well.

As a result of the impact of COVID-19, HansaMatrix does not expect to meet the previously announced 2020 revenue guidance. Q1 2020 sales results are estimated to exhibit around 15% year on year decrease, compared to Q1 2019. Due to dynamic changes in the COVID-19 situation it is too early to provide the estimations of the potential impact on HansaMatrix sales in Q2 and Q3 of 2020.

HansaMatrix considers the COVID-19 impact to be short-term in nature, especially taking into account China experience with containing COVID-19, where indicators of people and goods movement, have significantly improved in only six weeks after the initial outbreak. (source: Harward Business review online article “How Chinese Companies Have Responded to Coronavirus”, available: http://bit.ly/38VMPaV).

Māris Macijevskis, CFA
Management Board Member, Finance director
Phone: (+371) 6780 0002
E-mail: invest@hansamatrix.com

http://www.hansamatrix.com

About HansaMatrix

HansaMatrix is a fast-growing, high-technology company offering product design, industrialization and complete manufacturing services in data networking, Internet of Things, industrial segments and other services to high added value business segments. In addition to complete manufacturing services of OEM products, the company offers an ODM business model to both start-up and established companies that seek product development partnerships.