The share price of Haier Electronics Group fell 10.24 per cent yesterday, after the company warned of poor performance by its mobile-phone business in the first half. In a statement on Thursday, the group said first-half results would be adversely affected by the operating losses and impairment losses in goodwill in its mobile-phone business. 'The company's mobile-handset business will report an operating loss for the six months ended June 30 due to unfavourable market conditions in China, including intensifying competition and price reduction of mobile handsets. There was a decrease in sales and increase in provisions for doubtful debts and inventories for the mobile-handset business compared with 2004,' the announcement said. The firm is likely to incur an impairment loss in the first half, as its directors are considering writing down goodwill attributable to the firm's interest in the mobile-handset business. The company was unable to quantify the loss. Haier recorded a $44.5 million loss from amortisation of goodwill last year and a loss of $732.2 million from an impairment of goodwill in 2003. The firm posted a net loss of $42.47 million on turnover of $3.15 billion last year, incurred entirely in the mobile-handset business. The washing machine business, which Haier acquired from its mainland parent Haier Group last year, is expected to contribute this year. Haier's share price closed at 14.9 cents yesterday amid heavy trading of 60.98 million shares.