Skyworth Digital posts 42pc drop in earnings

PUBLISHED : Tuesday, 25 July, 2006, 12:00am
UPDATED : Tuesday, 25 July, 2006, 12:00am


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Skyworth Digital Holdings, a leading mainland television maker, said net profit slumped 42.6 per cent for the year to March because of the lack of exceptional gains.

Net profit fell to $216 million from $376 million a year ago. Turnover edged up to $10.69 billion from $10.46 billion.

Without the one-off gain, profit for last year should have been about $200 million, the firm said.

'Last year, given the intense competition, such results are not bad,' executive chairman Wang Dianfu said.

'Skyworth's core competitiveness has strengthened.'

Skyworth would budget capital expenditure of $360 million for this fiscal year, mainly on two factories in Shenzhen and Inner Mongolia, which would start production in the fourth quarter, finance director Frederic Leung said.

In the first quarter, Skyworth reported a 15 per cent year-on-year increase in television sales in China to 1.11 million units.

'The first-quarter results were a bit disappointing,' said Bertram Lai, an analyst with CIMB-GK Research.

China's TV market accounted for 80.4 per cent of Skyworth's revenue for the previous year.

Skyworth's former chairman, Stephen Wong Wang-sang, and his brother, former executive director Wong Pui-sing, were sentenced to six years jail earlier this month for stealing more than $50 million from the company.

Target Success Group, which holds 37 per cent of Skyworth, wrote a letter on Friday stating it had no plans to sell any shares in Skyworth for the foreseeable future, Skyworth said yesterday.

Target is holding the shares in trust, of which Stephen Wong's wife, Lin Weiping, and children are the discretionary beneficiaries.

'There is no evidence of any wrongdoing by Ms Lin,' Mr Leung said.