The company cited re-routing of shipments and closure of major ports and airports, resulting in increased transit time.
As a result, the step-down subsidiary has informed Redington of increased working capital needs due to higher inventory and requests from customers for delayed payments. “The business is prioritizing the need for capital preservation,” the filing stated.
Redington also stated that the war has resulted in increase in freight, insurance and logistics costs as well as revocation of war risk coverage by insurance providers for companies operating in the region, even as alternative arrangements are being currently evaluated.”At this stage, it is not possible to reliably quantify the financial impact, since the same would depend on the duration and intensity of the situation,” Redington said, adding that the company will continue to closely monitor developments and keep the exchanges informed.
The company has also implemented enhanced safety protocols and business continuity plans across affected locations and continues to operate in full compliance will all applicable international regulations, trade restrictions and sanctions.
For the third quarter, Redington’s global business, including its Turkish acquisition Arena, grew by 16% from last year, and contributed 46% to the overall topline. The exact contribution from West Asia is not disclosed.
Redington is one of the major vendors for Apple in the country, still deriving a third of its topline from the iPhone maker. It also acts as a vendor for Samsung, Dell, HP, Lenovo, and others.
Shares of Redingtonare trading 5.1% lower on Tuesday at ₹221.1. The stock is down 10% in the last one month.
