China woes pull down TCL profit

First-half net profit at TCL Multimedia Technology, the world's third-largest maker of flat-screen televisions, plunged 41.6 per cent to HK$254 million as the firm faces challenges from internet television and slower sales growth on the mainland.

The expiry at the end of May of central government subsidies on home appliances has added to the woes of the firm, which has suffered an erosion of its profit margin due to slowdown in mainland economic growth.

Mounting competition from internet television operators, which offer programmes from local and overseas channels via the web, is also threatening the business of TCL and its rivals.

TCL's sales grew 22.4 per cent year on year to 18 billion yuan (HK$22.8 billion) in the first half. However, operating profit plummeted 47 per cent to 331 million yuan as expenses for selling and distribution, administration and research and development rose.

Underlying net profit, stripping out a one-off gain in the year-earlier period, slumped 21 per cent to HK$193 million.

The firm sold 7.82 million LCD televisions worldwide, up 21 per cent year on year. Mainland sales jumped 36 per cent to 4.54 million sets, while overseas sales edged up 4 per cent to 3.2 million.