Marbridge Daily

<- April 26, 2012 ->

TCL Communication Q1 2012 Profit Down 86%

Hong Kong Exchanges and Clearing, 4/26/12

Chinese handset manufacturer TCL Communication Technology (2618.HK) has announced its unaudited financial results for the first quarter ended March 31, 2012, with revenues down 0.09% YoY to HKD 2.11 bln.

Net income decreased 85.7% YoY to HKD 25.70 mln.

In Q1 2012, total sales volume of handsets and other products reached 7.8 mln units, down 10% from Q1 2011. A total of 6.5 mln units were sold in overseas markets; while 1.3 mln units were sold in the China market, down 211% YoY.

During the period under review, shipments to Europe, Middle East and Africa (EMEA) decreased by 26% YoY to 2.5 mln units due to the subsequent influence of the unstable political status in Africa and the European debt crisis. Nevertheless, TCL Communication still recorded strong growth in France and Spain, which was mainly due to positive response to the the low-cost 'Bic' phone (ONE TOUCH 204), marketed by Orange.

In Q1 2012, sales in the Americas dropped by 21% YoY to 3.4 mln units, during the product transition period. Owing to robust sales of entry-level smartphones, the launch of dual-SIM products, as well as stronger direct sales to distributors, Columbia, Chile and Dominican Republic still achieved significant growth during the period under review.

In Q1 2012, TCL Communications' sales volume in the Asia Pacific (APAC) region reached 0.6 mln units, up 10% YoY. TCL Communication's diversified and balanced product portfolio, which consisted of both entry-level and 3G Android handsets, helped it to penetrate different markets. TCL Communication recorded strong performance in Indonesia, Vietnam and Israel, and the Group's low-end camera phone, the One Touch 318D, was the best seller in the APAC region.

In Q1 2012, the sales volume of handsets in the China market reached 1.3 mln units, up 211% YoY. The performance was attributable to the robust sales of smartphones, the expansion of TCL Communication's sales network.

For the China market, TCL Communication will continue to enhance its market penetration in the country by launching new products customized for local consumers, expanding its distribution network, and fostering partnerships with the three major telecommunication operators and major online media enterprises in China. TCL Communication has completed the establishment of 4,200 points of sale in China, which will be increased to 6,000 by the end of Q2 2012.

TCL Communication expects a gradual improvement in sales from Q2 2012 onwards, and reiterates that its target for the year 2012 is to achieve a 30% YoY increase in revenue.

To view TCL Communication's full earnings report, please click here.

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