Cordless-telephone maker VTech Holdings will make further provisions in the second half in relation to its restructuring.
Chairman Allan Wong Chi-yun's statement yesterday contrasted with comments he made to analysts in November, when the company announced its first-half results.
As it booked provisions of US$9.9 million for the first half, Mr Wong said VTech did not expect to book additional provisions. At least four brokerages - Nomura, SG, SBI E2-Capital and ABN Amro - quoted VTech's management in their November research reports as saying no further provisions were expected.
Since the first-half results announcement, VTech's share price has risen 103 per cent - closing at HK$8.90 yesterday. Investors have speculated on the company's recovery from its record loss of US$215 million in the year to March 31 last year. In September, it traded as low as HK$2.
In June last year, when VTech announced the record loss, Mr Wong said he expected additional provisions of about US$20 million would be required for the year to March 31 this year.
Yesterday, he said the expected second-half provisioning was due mainly to provisions that could not be booked last year, a longer than expected restructuring and the closure of certain operations. The September 11 attacks in the United States delayed the sale of a Mexico factory and also resulted in higher maintenance costs.
He would not reveal the size of the provisions, but said the company would still 'certainly' be able to book a net profit for the year to March 31.