Battery and electronics-manufacturer Gold Peak Industries (Holdings) has seen its net profit erode 18.9 per cent during the six months to September 30. Profit attributable to shareholders amounted to HK$38.2 million, down from HK$47.1 million in the corresponding period last year. Gold Peak's turnover also dropped 10.2 per cent to HK$558.5 million during the period, the company announced yesterday. Earnings per share fell to 8.2 HK cents from 12 HK cents in the previous year. The company declared an interim dividend of three HK cents per share, a decrease of 33.3 per cent from 4.5 HK cents for the same period last year. It blamed price-cutting aimed at capturing market share as the major cause for declining profits. 'We have forgone short-term profitability but targeted long-term earnings growth,' Gold Peak chairman and chief executive Victor Lo Chung-wing said. In the past 12 months, Gold Peak cut electrical products prices by an average of 10 per cent, while it trimmed battery prices by 5 to 10 per cent. Mr Lo said that the price reduction strategy had secured the company a dominant market share, which would allow the company to enjoy stronger growth when the market picked up during the next two years. Among the group's operations, its battery division - 42.08 per cent controlled Singapore listed GP Batteries - was most badly hit by the Asian economic crisis. GP Batteries reported a 49.3 per cent drop in net profit to S$8.7 million (about HK$40.45 million) due to price fluctuation in raw materials, especially nickel. Mr Lo said the high volatility of the yen, which increased material costs, was the primary reason for the decline in GP Batteries profit margins. However, he said that GP Batteries was expecting strong growth next year due to the fast expansion of wireless devices. Gold Peak's Singapore listed electrical division, Clipsal Industries, also saw its profit slump 35.1 per cent to S$5.6 million for the first half of this year, due to an exceptional lost related to introducing a Y2K bug-compliant computer in Australia.