Information technology provider Legend Holdings has confirmed analysts' fears by returning a loss attributable to shareholders of $194.58 million for the year to March 31. The group blamed a sudden surge of supply and a vicious price war during the year for the poor performance. The group's aggregate turnover fell to $3.69 billion, from the previous year's $3.71 billion. Legend, which designs, manufactures and distributes personal computer motherboards, posted a loss per share of 26.8 cents. The directors decided not to recommend payment of a final dividend. The performance was worsened by an exceptional loss of $48.9 million arising from a provision to decrease market value of inventories, and losses arising from relocation of a production plant. 'The group deeply regrets the unsatisfactory performance in the second half of the year under review and has already taken immediate steps to alleviate the impact,' the directors said. The loss came as no surprise as Legend had warned the market in March of an impending loss for the financial year due to a substantial margin erosion in its core operations and a dramatic decline in sales of personal computers in China. Legend had earlier begun 1996 full of optimism after posting a profit of $86.07 million for the previous year. The group said yesterday robust industry growth in 1994 and the advent of new technologies created an influx of companies into the industry and this led to a significant oversupply. A price war resulted which triggered a drastic drop in prices of personal computers and memory items, thereby slashing earnings at many information technology companies, including Legend. Legend said it had embarked on a diversification plan to move into the high-technology, high-margin markets, including printed circuit boards, systems integration and semiconductors. Chairman Liu Chuanzhi said: 'We will continue our operational restructuring exercise to reduce costs aggressively in response to intensifying competition.' 'We are firmly committed to returning the group to profitability in the near future so that our shareholders and staff can once again benefit from the group's success.' Legend shares yesterday fell 0.5 cents to 39 cents. A year ago they were trading as high as $1.25.
