Creative Technology posts narrower fiscal 2H21 net loss amid sales increase

Creative Technology's Sound Blaster product. Credit: Creative TechnologyCreative Technology's Sound Blaster product. Credit: Creative Technology

Creative Technology reported Thursday its fiscal second half net loss attributable to equity holders narrowed to US$7.72 million from a net loss of US$9.1 million in the year-ago period as net sales increased.

Net sales for the January-to-June period increased 23 percent on-year to US$36.93 million, the speaker-maker said in a filing to SGX.

“The increase was due mainly to revenue from new products launched in the current and previous financial year. In addition, the on-going work from home arrangements, homebased learning and other Covid-19 restrictive measures have also continued to contribute to the increase in sales of the group’s products,” Creative Technology said.

The gross profit margin increased to 33 percent in the fiscal second half, up from 28 percent in the year-ago period as higher margin products made up a larger proportion of sales, Creative said.

Other losses in the fiscal second half of US$1.9 million were mainly due to an exchange loss of US$2.0 million as the Singapore dollar, Japanese yen and euro depreciated against the U.S. dollar, the filing said.

For the full fiscal year, Creative Technology reported a net loss attributable to equity holders of US$7.67 million, narrowing from a net loss of US$17.57 million in the year-ago period. Net sales for the full fiscal year increased 38 percent on-year to US$84.47 million on growth across all regions, the filing said.

No dividends were recommended in the fiscal second half, unchanged on-year, Creative said.

Cautious outlook

Creative issued a cautious outlook, saying it was targeting fiscal 2022 revenue would remain at the current level and that it expected to report an operating loss.

The company pointed to an uncertain economic outlook due to the Covid-19 pandemic, particularly the spread of the Delta variant.

“In addition, market conditions have become more challenging in light of the supply chain disruptions caused by the global shortages of semiconductors, delay in shipping schedules due to port congestions and shortage of containers, and the skyrocketing increases in freight costs,” Creative said.

“The group has begun to face shortages of certain products due to component unavailability, with spike in prices of some components, and has also experienced more frequent shipping disruptions. These are expected to have an impact on the group’s results in the current financial year,” it added.