Kogan Admits Coronavirus Imput Will Hurt Business
Shares in Kogan has slumped after CEO Ruslan Kogan indicated that his company which relies on house brand imports from China will be impacted by the coronavirus.
Kogan also warned the company’s future earnings may be impacted resulting from China’s pivotal role as a global technology hub, which hosts manufacturing giant, Foxconn, and is also the world’s second largest economy. But he still says the company’s current performance has been untouched.
‘There’s been no current impact, but it’s still very early stages,’ Kogan CEO Ruslan Kogan told The Australian.
‘It’s hard to tell this early on what any potential impact may be down the track. It’s a situation where we do have some of our major factories back to work, but some aren’t. It’s still very early days. China is a key manufacturing country, it’s a manufacturing hub for the globe.’
The company said in its results on Tuesday that its 2HFY20 earnings may be impacted if the closures or delays of orders from global manufacturers and suppliers strike their products.
Shares in Kogan were slumped down to 3.88 per cent to $4.96 at 10.30am AEDT.
Kogan’s results for the half-year ending 31 December 2019 revealed a revenue of $219.5 million, down 5.3 per cent year-on-year, which the company put down to a successful launch of Kogan Martetplace.
Gross profit was up 10.6 per cent to $49.9 million, with adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) was up 35.2 per cent to $18.2 million.
Kogan said his business hit another record half and that its business plan and strategy was being executed well.
He also said that despite the market being saturated and competitive, the launch of Kogan Marketplace, the company now has more products than ever on its site and customers are winning.
But the CEO also said he wasn’t focusing on his company’s share price – which has slumped almost 30 per cent since the first half of the year – partly indicative of a decline in third-party product sales on the Kogan platform.
Kogan’s e-commerce platform sells products under its own branding alongside companies like Apple, Cookmaster and Ugg.
Instead, Kogan said he is focused on executing the company’s long-term business plan and that they’re keeping watch of external factors outside of their control. He said any shareholder that’s been with the company for a long time would be very happy with Kogan’s results.
Kogan Internet grew almost 355 per cent year-on-year, while Kogan Mobile grew 5.1 per cent. Kogan also posted a fully franked interim dividend of 7.5 cents per share.