HONG KONG, Feb. 10 /PRNewswire-Asia/ -- Nam Tai Electronic and Electrical Products Limited ("NTEEP" or "the Company") (Stock code: 2633), an electronics manufacturing and design services provider, today announced the audited consolidated results of the Company and its subsidiaries (the "Group") for the year ended 31 December 2008 and the unaudited consolidated results of the Group for the fourth quarter of 2007 ended 31 December 2008 respectively.
During the quarter ended 31 December 2008, the Group recorded sales of US$169.0 million, representing an increase of 167.5%. Sales of TCA segment (Zastron business unit) and LCDP segment (Jetup business unit) for the fourth quarter of 2008 decreased by 11.0% and 27.2% respectively when compared with the same period of 2007. These two business segments, TCA (Zastron business unit) and LCDP (Jetup business unit), acquired under the Reorganisation contributed sales of US$106.7 million. As compared with the same period last year, sales of CECP segment (NTEEP business unit) were almost flat.
Gross profit for the fourth quarter of 2008 increased by 54.5% from US$10.0 million to US$15.5 million as compared with the same period last year. Operating income and profit attributable to the equity holders of the Company for the fourth quarter of 2008 decreased by 51.2% and 960.0% as compared with the same period last year mainly because of the substantial reduction in profit contribution from the decrease of sales, and impairment losses on goodwill of US$143.6 million and intangible assets of US$1.0 million.
For the twelve months ended 31 December 2008, sales of the Group increased by 119.4% from US$283.8 million to US$622.6 million when compared with the same period last year, mainly because of the Reorganisation held on 31 December 2007 such that only sales of CECP business segment were included in year 2007. If sales for TCA business segment and LCDP business segment had been excluded, sales of the Group would have decreased by 4.5% as compared with the year ended 31 December 2007. Gross profit increased by 51.6% from US$48.8 million to US$74.0 million as compared with the same period last year. For the same reason as stated above, operating income and loss attributable to the equity holders of the Company for the twelve months ended 31 December 2008 also decreased by 0.8% and 300.4% as compared with the same period last year.
Under the current global economic downturn, we continue to experience weaker demand across all of our product segments. To offset the potential decline in our sales during 2009, management has remained focused on efforts to reduce cost, improve operating and manufacturing efficiencies and deliver advanced technologies and innovative manufacturing solutions that offer value to our customers. Recent actions taken to reduce costs and conserve cash include:
-- We have reduced headcount from 9,700 (as at the end of the third
quarter of 2008) to 7,100 (as at the end of the fourth quarter of
2008), accounting for about 27% reduction of the total workforce from
levels as at 30 September 2008. We continue to monitor the effects of
market conditions on the businesses of our customers and may further
reduce our workforce if reduced customer demand and market conditions
so require.
-- We have frozen salaries and are considering, in the worst scenario,
additional steps to reduce employee compensation, which, depending on
prevailing market conditions during 2009, could result in 2009
compensation reductions of up to 30 percent. Our management team will
also step up internal control measures and work hard to look for
effective ways to cut more costs.
-- We have determined not to declare dividends for 2008 to be paid in 2009
in order to maintain cash reserves during the continuing economic
turmoil.
-- We have determined to postpone until at least mid-2009 further
implementation of our expansion plans for new factories additions,
except for our new facilities in Wuxi, PRC, to be used for the
manufacture of Flexible Printed Circuit (the "FPC") boards and other
components subassemblies. That project is on schedule and nearing
completion.
Although we are taking a conservative position regarding expected demand during 2009 as the economic downturn continues or worsens, and expect further near-term declines in revenues that could even result in losses from operations during periods in 2009, we are nevertheless seeking to take advantage of perceived opportunities to expand our market share in targeted areas. Accordingly, we plan to strengthen our sales force and customer and technical support by establishing local sales and support offices in Japan and Taiwan to increase our presence and better serve our customers in those markets. By seeking to capitalize on these opportunities, we hope to ensure a more robust future when end markets stabilize and the recovery cycle begins.
About NTEEP
For more information about NTEEP, please visit its website at http://www.namtaieep.com. For more information about Nam Tai Electronics, Inc., please visit its website at http://www.namtai.com .
Nam Tai Electronic & Electrical Products Limited 2008 Q4 Results Key Highlights
(In thousands of US Dollars, except as otherwise stated)
Quarterly Results(a) 12 Months Results(a)
Q4 2008(d) Q4 2007 YoY(%) 2008 2007 YoY(%)
Sales (Revenue)(a) 169,021 63,191 167.5 622,561 283,760 119.4
Gross profit 15,459 10,003 54.5 74,023 48,843 51.6
% of sales 9.1 15.8 11.9 17.2
Operating income (c) 3,614 7,413 (51.2) 34,774 35,048 (0.8)
% of sales 2.1 11.7 5.6 12.4
Per share
(US cent(s)) 0.41 0.84 (51.2) 3.94 3.98 (1.0)
(Loss) profit
after tax and
minority
interests (b) (144,134) 16,760 (960.0) (121,934) 60,859 (300.4)
% of sales (85.3) 26.5 (19.6) 21.4
Basic (loss)
earnings per
share (US cents) (16.35) 1.90 (960.5) (13.83) 6.90 (300.4)
Diluted (loss)
earnings per
share (US cents) (16.35) 1.90 (960.5) (13.83) 6.90 (300.4)
Weighted average
number of shares
('000)
Basic 881,671 881,671 -- 881,671 881,671 --
Diluted 881,671 881,671 -- 881,671 881,671 --
Notes:
(a) Results in the fourth quarter, the second half year and the full year
of 2008 included the results of Consumer Electronic and Communication
Products ("CECP") business segment ("NTEEP business unit"),
Telecommunication Component Assembly ("TCA") business segment
("Zastron business unit") and Liquid Crystal Display ("LCD") Products
("LCDP") business segment ("Jetup business unit") upon the completion
of reorganisation of Nam Tai Electronics, Inc. (NYSE stock code: NTE)
("NTEI") and its subsidiaries (collectively "Nam Tai Group") on 31
December 2007 (the "Reorganisation"). Results in the fourth quarter,
the second half year and the full year of 2007 included the results of
CECP business segment only.
(b) Included:
(i) non-cash impairment losses of US$143.6 million on goodwill and
of US$1.0 million on intangible asset in the fourth quarter of
2008;
(ii) a gain of US$43.8 million in the second quarter of 2007 on
disposal of the investment in TCL Corporation; and
(iii) a non-cash impairment loss of US$24.3 million in the second
quarter of 2007 on goodwill arising from the Group's
acquisition of Namtek Group (comprising Namtek Japan Company
Limited and Shenzhen Namtek Company Limited.) in May 2005 and a
gain of US$8.3 million in December 2007 on disposal of Namtek
Group.
(c) Operating income = gross profit + other income - other
expenses - selling and distribution costs - administrative
expenses - research and development expenditure.
(d) The provisionally estimated fair values of assets acquired and
liabilities assumed on the Acquisition on 31 December 2007 were used
for preparation of the 2007 financial information. The fair value
assessment was completed during the current year, therefore, results
in previous quarters of 2008 have been restated to reflect the
finalised fair value of assets acquired and liabilities from the
Acquisition as at 31 December 2007. As a result, the net income for
the 3 months ended 31 March 2008, 30 June 2008 and 30 September of
2008 has been increased by approximately US$1,057,000, US$226,000 and
US$269,000 respectively, which was due to the change in amortisation
of intangible assets and recognition of deferred tax liabilities in
the corresponding periods.
For more information, please contact:
Nam Tai Electronic and Electrical Products Limited
Chan Bo Shan
Tel: +852-2263-1011
Fax: +852-2263-1223
E-mail: christenchan@namtai.com.hk