Telefield first half profit down slightly to HK$27mn

Yet revenue climbed 21.8% to HK$598.4mn with new products in the pipeline to drive future growth.

Telefield International (Holdings) Limited (“Telefield”) on Friday announced its interim results for the six months ended 30 June 2011 (the “Period”).

The Group’s revenue rose by 21.8% to HK$598.4 million, up from HK$491.2 million in the last corresponding period. It recorded a gross profit of approximately HK$116.0 million (2010: HK$111.0 million). Profit attributable to owners of the Company amounted to approximately HK$26.9 million (2010: HK$27.7 million). The Board declared an interim dividend of 2.0 HK cents (2010: Nil), according to a Telefield report.

The Group maintained a healthy financial position during the Period, with cash and cash equivalents totaling HK$184.5 million (at 31 December 2010: HK$58.9 million).

Mr. Cheng Han Ngok, Steve, Chairman of Telefield, said, “With increased sales from the EMS segment and growing branded business, we achieved a steady business growth during the period under review. Despite rising Renminbi exchange rate, raw materials and labour costs, we managed to minimize the impact of cost pressure through effective cost-cutting measures, including increased automation of manufacturing processes; bulk purchase of raw materials to benefit from greater discounts; and adjustment of selling prices.” 

In view of market uncertainties driven by the sovereign debt crisis in Europe and recent downgrading of the US government credit rating, the outlook for the consumer electronics sector remains cautious. With the Renminbi continuing to appreciate and inflationary pressure persisting despite a slowdown in economic recovery, the management expects the business environment to become more challenging in the second half of 2011. Nevertheless, the Group will continue to implement cost-control measures and capture business opportunities that deliver promising returns, allowing for steady growth. 

With respect to the EMS business, the Group will continue to focus on the niche markets. The Group’s ultrasound imaging equipment co-developed with a research institution in Hong Kong and other health care electronics products are progressing per schedule and more products are now scheduled for launch. The Group is also exploring opportunities in telecommunications products in new markets in Asia.

Considering Asia-Pacific’s rising affluence and greater economic potential, China in particular, the Group will seek to tap these markets by applying a business model that has been tested and honed in Europe and the US. The opening of an operation unit in Japan earlier this year and the planning of establishing a Shanghai office in the PRC will help explore the respective markets.

Subject to prevailing market conditions, the Group will bolster its expansion efforts and examine the possibility of the distribution of SMB phone systems in Central and South America following the extension of a license agreement regarding its licensed brand business. Moreover, the Group will extend its distribution business to Asia by first introducing computer and gaming accessories in China and Hong Kong later in the year.

Mr. Cheng concluded, “We will remain cautious with our expansion plans and will also focus on strengthening our core fundamentals. With proven strategies in place, the management is confident about our ability to achieve sustainable growth."