SINGAPORE (Nov 24): TPV Technology announced a loss of US$19.6 million ($26.4 million) for the 3Q17 ended Sept compared to profits of US$18.6 million in 3Q16.
This was due to a US$21 million inventory provision, higher selling expenses and the fair market valuation loss from foreign exchange (forex) hedges.
Revenue was largely unchanged at US$2.5 million compared to a year ago, with an improvement of gross profit margin to 8.2% from 7.9% in 3Q16 on the back of a favourable foreign exchange environment.
This was however offset by an inventory provision of US$21 million, which the group attributes to the rapid shift of mainstream TV demand to larger-sized products.
Selling expenses subsequently grew 14.2% y-o-y to US$104.7 million from US$91.7 million a year ago in order to promote sales.
Over the quarter, the group also recognised a loss of US$27 million arising from the fair market valuation of forex hedges compared to the gain of US$6 million registered in 3Q16.
Noting improving economic development and growth in China and Europe, the group believes its current economic environment will help improve market sentiment and drive consumption during the festive season towards the end of the year.
Additionally, TPV Technology is expecting an improvement in sales realisation and inventory reduction in the fourth quarter that should result in inventory being “optimised to a healthy level” by the end of the year.
Shares in TPV Technology closed flat at 23 cents on Thursday.
