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Sean Kennedy

SEMI-TECH (Global) Co says its associate, Sansui Electric Co, will lose 600 million yen (about HK$42 million) in the year to December 31, instead of a net profit of 100 million yen.

Semi-Tech said in a revised forecast issued yesterday that sales would be 10 per cent lower at nine billion yen, for an operating loss of 400 million yen, and a net loss of 600 million yen.

This contrasts with a forecast last August of an operating profit of 300 million yen. Semi-Tech blamed the revision on lower sales, due to a stagnant audio market in Japan.

It also cited as factors a delay in planned expense-saving and lower than expected royalty income, and it said the 400 million yen operating loss also was partly due to the yen's fluctuations in 1995.

Semi-Tech added that the projected net loss of 600 million yen was an improvement of 472 million yen over the comparative figures for 1994 if the special royalty income was taken into account.

It did not offer further details about the special royalty income.

Sansui said it had cut operating losses year-on-year by 156 million yen, mainly due to economies in sales and general administration.

It said sales were almost at the same level, despite the unfavourable factors.

Sansui is a specialist maker of audio equipment, and is part of the Semi-Tech group.

In March last year, it revealed an operating loss of 2.17 billion yen, which translated into net losses of 1.46 billion yen.

Earnings a share for 1994 were losses of 6.7 yen.

Five months later, Sansui Electric announced it had narrowed its net loss after tax to 606 million yen for the first six months ended June 30.

But its operating loss was down 42.4 per cent to 255 million yen on the back of increased sales and gross profit and an overall reduction in sales and general administration expenses.

Other electronics companies controlled by Semi-Tech have also revealed that business was tough.

Last August, Akai Electric reported a net loss of 3.3 billion yen for the seven-month period from November 21 to June 30 last year. Akai booked an exceptional gain of 9.5 billion yen from the waiver of bank loans, but also made provision for 8.4 billion yen for its restructuring and rationalisation programme.

Analysts said weak market sentiment and fierce competition in the audio-visual industry, worldwide and in Japan, and the sharp rise in the yen affected the company's sales and profit.

Akai expected the difficult environment to continue, but it anticipated a near break-even position for the next financial term.

In October, Semi-Tech blamed an adverse business environment in Germany for a 33.2 per cent plunge in first half net profit at Semi-Tech (Global) Co. The group reported net profit attributable to shareholders of $468 million, compared with $701 million in the year-ago period.



Semi-Tech associate Sansui faces $42m loss