(Reuters) - Senior Plc on Thursday forecast annual loss to be slightly smaller than previous expectations, and the British aircraft parts supplier added that it would exit its oil and gas sector services business in Malaysia as it cuts costs.
The company, which caters to aviation, oil and gas and defence industries, said it expects its biggest division - aerospace - to post a roughly 37% slump in sales for the year ended Dec. 31 as it was hurt by COVID-19 disruptions to business as well as Boeing's 737 MAX crisis.
Senior's shares were up about 3% at 92.8 pence in early trade in London after the British company said fourth-quarter performance was slightly ahead of its prior expectations.
Though the latest round of coronavirus restrictions could further jeopardize an industry that was already reeling from the 737 MAX jet groundings in 2019 as well as pandemic-led jet production cuts and a shortfall in airline sales.
"Our view remains that it is likely to be 2022 before we see a meaningful recovery in Group revenue and in 2021, aerospace is set to be at least as challenging as 2020 given the current customer-announced production rates," the company said.
The company has also been restructuring its business to ride out the global crisis, and the bulk of its closure activities for its Flexonics Upeca business in Malaysia is expect to be in the first quarter of 2021, Senior said.
Senior expects full-year revenue to come in around 733 million pounds ($1 billion). In 2019, it posted sales of 1.11 billion pounds and adjusted pretax profit of 78.5 million pounds.
($1 = 0.7318 pounds)
(Reporting by Pushkala Aripaka in Bengaluru; Editing by Saumyadeb Chakrabarty and Sherry Jacob-Phillips)