Plastoform suffers net loss of HK$8.6m in 3Q13

As revenue almost halved to HK$84m.

Singapore Exchange Mainboard-listed Plastoform Holdings Limited (Plastoform) had on 14 November 2013 announced its results for the three months and nine months ended September 30, 2013 (3Q 2013 and 9M 2013, respectively).

For the quarter, Group revenue declined 44.6% from HK$151.8 million in 3Q 2012 to HK$84.0 million in 3Q 2013, mainly due to highly competitive market conditions faced by its customers in 3Q 2013.

The company said that despite being the pioneer in the Bluetooth speakers segment, the Group’s quality speakers have been competing with a large variety of new and lower cost brands while on the other extreme, top end brands have established a new demand, sandwiching the Group’s customers in between.

In line with the lower revenue and higher marketing expenses in anticipation of the new market trends, cost of sales declined by 37.5% or HK$47.1 million from HK$125.7 million in 3Q 2012 to HK$78.6 million in 3Q 2013.

The Group’s selling and distribution costs increased by 63.1% or HK$1.1 million from HK$1.8 million in 3Q 2012 to HK$3.0 million in 3Q 2013 as the Group continued to push into new markets. Operating expenses were HK$11.4 million in 3Q 2013, an increase of 45.5% or HK$3.6 million from HK$7.8 million in 3Q 2012. The increase is due to higher staff expenses and training as well as productivity and risk management consultancy fees.

As a result, the Group recorded a loss before income tax of HK$8.6 million in 3Q 2013 compared to a profit of HK$16.7 million in 3Q 2012.

The Group remained in a healthy financial position, with cash and cash equivalents of approximately HK$40.3 million as at September 30, 2013, compared to HK$18.8 million as at December 31, 2012.

Commenting on the Group’s outlook, Mr Tse said, “The highly competitive environment requires us to align our business with the right partners. We also see the need to balance our dependence on established brands and grow our own brand. In the light of this, we are repositioning ourselves further in this rapidly evolving market segment. We believe we will serve our shareholders well as we continue to capitalise on our strengths and reputation of being innovative and anticipative of market needs. There will be new initiatives that we hope to present in 2014.”

Based on current market outlook and secured customer orders, the Group remains moderately optimistic going into 4Q 2013, and 2014.