Turnarounds to Profitability
Maintains Healthy Balance Sheet and Cash Position
HONG KONG, March 25 /PRNewswire-Asia/ -- TCL Multimedia Technology Holdings Limited ("TCL Multimedia," or the "Group," Stock code: 01070) today announces the audited consolidated results for the year ended 31 December 2008.
Highlights:
For the year ended 31 December 2008:
-- Operating results (EBIT) continued to improve and achieved a turnaround
from HK$189 million loss in 2007 to HK$331 million profit in 2008, and
turnover increased by 21.0% year-on-year to HK$25,773 million
-- Loss for the year (including the effects of fair value adjustment of
convertible bonds) was HK$251,461,000. Profit before the effects of
convertible bonds achieved a turnaround from HK$415 million loss in
2007 to HK$41 million profit in 2008
-- LCD TV sales volume increased by 233.1% year-on-year, combining data
from Displaysearch on LCD TV shipment and our Strategic OEM shipment,
LCD TV market share ranking of the Group has moved up from No.13 last
year to No.8 in 2008. LCD TV market share in the PRC market increased
from about 9% in the first three quarters to 15% in the fourth quarter.
-- Continued to be a prestigious TV brand and the market leader of the PRC
market, with 17.1% market share (Source: Displaysearch)
-- Early redemption of the convertible bonds freed the Group from various
financial covenants, reduced finance costs and enhanced the financial
position of the Group
-- Achieved healthy financial position with current ratio of 1.2, gearing
ratio of 0.8%, HK$2,158 million cash on hand and a positive operating
cashflow
-- 3D TV successfully launched and the X9 Series LCD won the Global
Innovative Flat Panel TV Award in 2008 Consumer Electronic Show
For the year ended 31 December 2008, the Group's turnover was HK$25,773 million, a 21.0% increase from HK$21,294 million for last year. The increase in turnover was mainly attributable to attractive product offerings and effective sales and marketing efforts which led to significant increases in LCD TVs sales. Combining data from Displaysearch and the Group's Strategic OEM shipment, LCD TV market share ranking has moved up to No.8 in 2008 as compared with No.13 last year. Turnover from TV sales amounted to HK$22,361 million, an increase of 25.2% and accounting for 86.8% of the Group's total turnover. Gross profit was HK$4,107 million, an increase of 15.1% from HK$3,567 million for last year. Capitalizing on the Group's strengthened operational efficiency, operating results continued to improve and achieved a turnaround from HK$189 million loss in 2007 to HK$331 million profit in 2008. Profit before the effects of convertible bonds, which are attributable to equity holders of the parent, achieved a turnaround from HK$415 million loss in 2007 to HK$41 million profit in 2008.
"We are very pleased with the performance and results this year. With concerted efforts of the management and staff, the Group has begun to implement various measures to improve the performance of its operation," commented Mr. LEONG Yue Wing, CEO of TCL Multimedia. "More importantly, the Group has begun streamlining its financial structure to maintain a healthy balance sheet and sound cash position. The strong year-over-year growth in operating results reflects some of the early results of these initiatives. I look forward to building upon these gains in 2009 and beyond."
During the year under review, the Group remained strategically focused on enhancing its financial position. The convertible bonds (originally due in 2012) were redeemed early in June 2008. As of 31 December 2008, the Group recorded a current ratio of 1.2, and gearing ratio of 0.8%. Cash and bank balances reached HK$2,158 million, compared to HK$1,095 million for last year.
Resulting from the successful strategy of shifting product mix and production lines towards LCDs, the Group sold approximately 4.2 million LCD TVs, up 233.1% compared to the previous year. LCD TVs represented 29.1% of total TV shipments in 2008, substantially increased from 8.4% in 2007. At the same time, the Group considered that CRT products still provide profitability and management took strategic actions to capitalize on its investment in the CRT business. The Group maintained its CRT TV global market share and sold a total of approximately 10.2 million TV units during the year.
The Group's LCD products use of state-of-the-art technologies, including self-developed and patented "Natural Light," endowing them with innovative green energy-saving and eye-protection functions, significantly increased its competitiveness. During the year under review, the Group also released the innovative 3D autostereoscopic LCD TV in response to diversifying demand. Furthermore, the Group obtained the core technology for producing China blue laser disc players. The Group aims to roll out highly advanced, cost-competitive products to the market in a timely manner to boost its position as one of the world's top brands.
Amidst the global financial crisis and challenging conditions overall, management believes the Group will capitalize various emerging business opportunities through continuous improvement of its competitiveness. In the PRC, the domestic economy will continue to grow, leading to strong demands in the market in 2009. The government is expected to carry out a series of stimulus measures to boost demand in the industry, including the Central Government's "Household Appliance Subsidy Scheme." These measures will drive the growth of colour TV market, in particular the LCD TV market. The Group won the most bids among TV manufacturers. As a result, the Group will strive to increase its market share this year. For overseas markets, digital TV transition and new industry standards, including a new generation of video compression technology, will be legally compulsory in different countries and key markets around the world. The Group will strategically capitalize on these opportunities and achieve growth through enhancing its R&D efforts and product range competitiveness while monitoring its operating costs and overall efficiency. The Group will add more resources to its LCD TV business. The Group initiated a blueprint for production vertical integration and started building a new LCD TV production plant next to the existing LCD module plant in Huizhou. This new plant will have an annual production capacity of 3 million sets of LCD TVs and 2 million sets of semi-finished LCD kits. Management expects that the production costs will be significantly reduced while assuring quality, leading to further enhancements in the competitiveness of LCD TVs manufactured by the Group.
"These positive results reflect the continued success of our experienced management team in implementing initiatives that establish global brand, maintain good customer relationships, enhances core competencies in operation and ensures strong cash-flows," Mr. LI Dongsheng, Chairman of TCL Multimedia said. "We will continue to secure profit levels and shareholder value through the effective management of expenses, a streamlined operation, improved supply chain and inventory control."
Sales volumes by region for the year ended 31 December are indicated below:
2008 2007
('000 sets) ('000 sets) Change
LCD TV 4,184 1,256 +233.1%
PRC 1,466 794 +84.6%
Overseas & Strategic OEM 2,718 462 +488.3%
CRT TV 10,182 13,755 (26.0%)
PRC 5,382 6,342 (15.1%)
Overseas & Strategic OEM 4,800 7,413 (35.2%)
Total TV shipments 14,366 15,011 (4.3%)
AV products 16,893 19,135 (11.7%)
About TCL Multimedia
TCL Multimedia Technology Holdings Limited is one of the largest TV manufacturers globally and its products are sold all over the world. Headquartered in China, TCL Multimedia operates its manufacturing plants and R&D centres across all major continents. The Group's largest shareholder is TCL Corporation.
