Mainland TV maker's interim earnings buoyed by $44m foreign exchange gain
Mainland television maker Skyworth Digital Holdings yesterday blamed cut-throat market competition for a 75.3 per cent decline in net profit for the six months to September, the latest setback for the scandal-hit firm still suspended from trading on the Hong Kong stock exchange.
The Shenzhen-based company, one of China's top five television makers, said net profit fell to $43 million from $176 million a year earlier as the company faced stiff competition in its core domestic market.
The news could have been worse as the net profit tally included a $44 million foreign exchange gain. Overall, revenue from the firm's 'other operating income' rose to $77 million from $38 million during the period.
'A significant increase in cost of sales resulting from cut-throat market competition, the increase in prices of raw materials, and the drive to increase Skyworth's brand image have had an adverse impact on profits,' the company said.
Skyworth pumped an extra $219 million into selling and distribution expenses as it sought to stimulate sales and increase the brand's exposure through advertising and other promotional activities.
Overall, selling and distribution expenses rose 46.5 per cent to $690 million.