Overall sales performance exceeds pre-financial crisis levels
HONG KONG, April 28 /PRNewswire-Asia/ --
FINANCIAL HIGHLIGHTS
Unaudited results for the 3 months ended 31 March
(HK$ '000) 2010 2009 Change
Turnover 1,474,149 614,549 +140 %
Gross Profit 292,287 85,519 +242 %
E(L)BITDA before effect of
convertible bonds* 85,372 (15,522) N/A
Net profit / (loss) before effect
of convertible bonds* 69,533 (42,388) N/A
Effect of convertible bonds* -- (10,963) N/A
Profit / (loss) attributable to
owners of the parent 69,533 (53,354) N/A
Basic earnings / (loss) per share
(HK cents)(as restated) 6.54 (5.83) N/A
* The effect of convertible bonds included the changes in fair value of
derivative components of convertible bonds and interest.
TCL Communication Technology Holdings Limited ("TCL Communication" or the "Company") (HKSE stock code: 02618) today announced unaudited quarterly financial results of the Company and its subsidiaries (the "Group") for the three months ended 31 March 2010 ("Review Period").
During the Review Period, the Group reported revenue of HK$1,474 million, an increase of 140% and 21% respectively from the same period in 2009 and 2008. Gross profit amounted to HK$292 million, an increase of 242% and 36% respectively compared to the same period in 2009 and 2008. These results indicate that its operating performance has not only fully recovered, but also exceeded the pre-financial crisis level. In the first quarter 2010, the average selling price fell from US$37 in the previous quarter to US$33, meanwhile the gross profit margin fell from 26% to 20%. During the Review Period, profit attributable to owners of the parent reached HK$70 million as compared to a loss of HK$53 million for the same period of last year. Basic earnings per share were HK6.54 cents as compared to a loss of HK5.83 cents in the same period of last year.
Mr. Guo Aiping, Chief Executive Officer of TCL Communication, commented, "The global handset market saw a modest recovery in the first quarter of this year. We captured the opportunities to deepen and expand strategic cooperation with major telecommunication operators in different regions and achieved satisfactory results. Sales in various markets were pleasing. Meanwhile, the shipment of ODM products continued in the first quarter of this year. This business grew steadily and achieved promising results."
Total sales volume of handsets and accessories during the Review Period climbed to 5.79 million units, a remarkable increase of 154% and 72% respectively from the same period in 2009 and 2008 and a 15% decrease from the fourth quarter in 2009. Overseas sales volume topped 5.34 million units, an almost two-fold increase from the same period in 2009 and a 72% increase from the same period in 2008. Overseas markets became a major driving force for the rapid growth of the Group's business. Sales volume in the PRC was approximately 450,000 units, an 8% decrease from the same period in 2009 and a 69% increase from the same period in 2008.
European, the Middle East and African Markets ("EMEA") and Americas remained the biggest revenue contributors. During the Review Period, due to the satisfactory sales of the OT-800 ("Jade") and OT-708 ("One Touch MINI"), sales volume in EMEA totaled 2.05 million units, representing a substantial increase of 120% and 46% respectively from the same period in 2009 and 2008, and the sales volume in Americas soared to 2.77 million units, a significant increase of 252% and 82% from the same period in 2009 and 2008.
Meanwhile, the Group continued the shipment of ODM products during the Review Period. This operation grew steadily and its sales results were in line with expectations. The Group will further develop ODM business by actively exploring more business partners.
The Group also made great progress in product development. It rolled out a number of low to mid-end handsets in the first quarter of this year to address different needs in the market. They included a model of ultra low cost handset, three models of entry-level camera phones and four models of mid-end phones, which featured stylish designs and a variety of functions including entertainment, instant messaging and social networking. They all received enthusiastic response by the market. Moreover, it strengthened cooperation with internationally renowned fashion brands in order to enrich and diversify its product mix.
In January 2010, the Company completed a rights issue and successfully raised approximately HK$358 million, which enabled the Group to increase its production capacity and to expand its businesses, thereby laying a solid foundation for its sustainable growth.
Looking ahead into the overall performance of 2010, Mr. Li Dongsheng, Chairman of TCL Communication, said, "The management believes that the global economy will maintain satisfactory growth in 2010. The handset sector is expected to emerge from the doldrums caused by the financial crisis and to achieve modest growth amid a favourable operating environment. Confronted with opportunities and challenges, we will take a pragmatic approach to expansion, exercise stringent control of inventories and costs and enhance risk management. While consolidating the development of the low-end handset business, we will gradually explore mid- to high-end operations in order to extend our value chain and improve profitability."
Mr. Li Dongsheng said, "The Group will further deepen and expand strategic cooperation with major telecommunication operators in different regions. In addition to our own brand businesses, we will actively expand the ODM operation to enhance overall sales growth and operating efficiency. Meanwhile, the Group will energetically strengthen research and development of 3G products, OMS-based handsets, data cards and multi-functional handsets with the aim of enriching the product mix and the competitiveness of our products. With the joint efforts and dedication of management and all staff members, the Group's operating results will grow steadily."
Appendix: Sales volume breakdown by location
Unit sales of handsets and accessories for the 3 months ended 31 March
('000 units) 2010 2009 Change (%)
Overseas 5,340 1,787 +199 %
The PRC 449 489 -8 %
Total 5,789 2,276 +154 %
About TCL Communication
TCL Communication engages in design, manufacture and marketing of a variety of mobile handsets and accessories in the PRC and international markets. Its handsets and accessories are marketed in the PRC Market, the European, the Middle East and African Markets ("EMEA") and Americas under the "TCL" and "Alcatel" brands. For more information, please visit the Company's website: http://tclcom.tcl.com .
For more information, please contact:
Investor and media enquiries:
TCL Communication Technology
Holdings Limited
Andrew Yip
Tel: +86-755-3331-3019
Email: andrew.yip@tcl.com
PRChina Limited
Henry Chik
Tel: +852-2522-1368
Email: hchik@prchina.com.hk
PRChina Limited
David Shiu
Tel: +852-2521-2823
Email: dshiu@prchina.com.hk
