Skyworth Digital, the mainland's second-largest television maker, said profit dropped 40 per cent last year as it faced restructuring costs in overseas markets.
Net earnings slid to HK$128 million for the year ended March as gross margin fell to 16.3 per cent from 18.7 per cent. Total sales grew 17.4 per cent to HK$12.56 billion, aided by expansion in the high-end television and digital set-top-boxes market.
'The operation of our overseas TV business and two smaller units engaged in consumer electronic products were still being restructured and therefore did not perform as expected,' the company said yesterday.
Vice-president Yang Dongwen said the margin squeeze was due to a loss of HK$68 million in the overseas television business as well as price pressure in mainland markets.
Mr Yang expected margins will be stable this year so the overseas businesses can break even.
'We are benefiting from the government's commitment to promoting digital broadcasting and taking advantage of the expected increased demand for digital set-top boxes,' Mr Yang said.
