Creative Technology has reported a net loss for the 2HFY2023 ended June 30 of US$6.1 million ($8.28 million), a smaller loss compared to the US$12.2 million in the 2HFY2022.
This smaller margin of losses is due to a reduction in operating expenses, following the restructuring exercise in December 2022 to restructure the group’s operations and reduce costs to be in line with the lower level of business activities.
The restructuring exercise was led by former chairman and CEO Sim Wong Hoo, who died on Jan 4. Sim founded and led the company for four decades.
Net loss for the 2HFY2023 includes interest income of US$0.9 million and other losses of US$0.7 million, mainly due to exchange loss.
The group’s net sales for FY2023 decreased by 8% compared to FY2022.
The net sales for the second half year of FY2023 was about the same as the first half year of FY2023, and increased marginally by 3% compared to the second half year of FY2022.
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Asia Pacific’s net sales in FY2023 decreased by 18% compared to FY2022 while net sales for the Americas and Europe regions decreased marginally by 1% and 2%, respectively, compared to FY2022.
The group’s gross profit margin for FY2023 was 25% compared to 32% for FY2022. Gross profit margin was 29% in 2HFY2023, same as 2HFY2022.
The group says gross profit margin for FY2023 was impacted by a lower gross profit margin in the first half year of FY2023, mainly because of the difficult business environment with rising inventory and other business costs.
This is in addition to price reduction of certain of the group’s products during that period, which have adversely affected their gross profit margin.
The group saw a decrease in cash and cash equivalents in FY2023, as US$12.2 million of net cash was used in operating activities for the operating loss it incurred for the financial year.
Net cash used in investing activities of US$1.2 million in FY2023 was due mainly to additional investments in financial assets at fair value through profit or loss.
Net cash used in financing activities of US$2.5 million in FY2022 (FY2022: US$2.3 million) was due mainly to repayment of lease and interest on lease liabilities.
According to the group’s financial report, there is no significant variance in the operating performance in the second half year of FY2023 as compared to the prospect statement disclosed in the announcement of results for the first half year of FY2023.
Shares in Creative Technology closed 6 cents lower or 4.88% down at $1.17.
