Debt-ridden electronics goods maker Orient Power Holdings plunged into a $1.25 billion net loss last year from a $38.05 million net profit a year ago as a result of provisions and restructuring costs. The maker of compact disc and DVD players said it had to make 'necessary' provisions of $903.14 million as it sought to put operations back on track and settle outstanding debts of $1.5 billion. News of the staggering loss caused the company's share price to tumble 6 per cent to 18.8 cents, with 2.7 million shares trading within the first four minutes of the stock market opening yesterday. The group halted stock trading at 10.04am after realising its results announcement had not been published in print media yesterday. Amid the hefty provisions, an ongoing debt restructuring and civil lawsuits with electronics giant Philips, auditor Ernst & Young clarified that its work on the group's profit and loss account was only of a limited scope. It concluded the report with a disclaimer. The auditor said the Philips suit posed significant contingent liabilities, pending a High Court ruling. Last year, Philips sued Orient Power and its subsidiaries for allegedly infringing its CD and DVD patents. Philips claimed unpaid royalties of more than US$60 million. Contesting the claims, Orient Power said it had valid defence and believed it had made sufficient provision for the legal expenses. However, it did not expect the dispute to be resolved in the near future. The provisions included a string of items such as $290.12 million for obsolete inventories, $108.6 million for impairment and write-off of properties, plant and equipment, $287.03 million for receivables and $106.46 million for research and development costs. To generate cash last year, Orient Power sold stock at steep discounts, made provisions for outdated stock, terminated loss-making operations and suspended subcontracting practices. 'These initiatives and associated rationalisation of the group's balance sheet will provide a firm platform on which the group can build a viable business,' the company said. However, its financial health was crippled with deficiency of assets of $497.79 million and a net cash outflow from operating activities of $550.02 million last year. Orient Power was given temporary breathing space after its bank creditors agreed to extend a standstill agreement on outstanding bank borrowings of $1.13 billion until the end of next month amid negotiations for a debt-restructuring plan. The group said its trade creditors, which were owed $333.69 million, would continue normal trading arrangements with it even though several claims had been filed against the company. Orient Power vowed to continue the corporate overhaul by shifting to more profitable business, cutting factory overheads, divesting certain properties and coming up with a medium to long-term debt repayment schedule.