The Phoslock Environmental Technologies Ltd (ASX: PET) share price has come under pressure on Friday after releasing an update on its China operations.
In afternoon trade the environmental technology company’s shares are down 3.5% to 81.2 cents.
Why is the Phoslock share price under pressure?
This morning Phoslock released an update on its projects and personnel following the outbreak of coronavirus in China.
Coronaviruses are a family of viruses that cause infections in the respiratory system. The recent outbreak started in the city of Wuhan, where Phoslock has been working in recent months.
According to today’s release, the company’s application and engineering teams completed the first Phoslock applications in Wuhan in September and October. As a result, it currently has no personnel in the city.
Though, it is scheduled to return to the city in the near future. Phoslock is due to conduct further applications at South Lake in Wuhan in April and May of this year.
This is subject to local conditions and the reopening of the city. As of yesterday, Wuhan, which is a city of 11 million people, had no trains or planes coming in or out of it.
For now, though, Phoslock advised that there has been no impact on its business. It intends to provide further updates to the market if the situation changes.
What does Phoslock do?
Phoslock is an international environmental technology company specialising in engineering solutions and water treatment products. These are used to remediate polluted lakes, rivers, canals, and drinking water reservoirs.
Demand for its services in China has been growing very strongly, leading to the company providing very positive guidance for FY 2020.
In FY 2019 the company expects to deliver sales of $27 million to $30 million. Whereas in FY 2020 management is estimating a massive jump in sales to $50 million to $70 million.
Investors will no doubt be hoping that the situation in China doesn’t derail project developments and cause Phoslock to fall short of its guidance.
The post Phoslock share price tumbles lower on coronavirus update appeared first on Motley Fool Australia.
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