Creative Technology reports 14th quarter loss

Latest quarter earnings show net loss of US$33.9 million, as Singapore tech company attributes revenue decrease to "difficult market".

SINGAPORE--Local company Creative Technology has posted a net loss of US$33.9 million in its second-quarter 2012, marking the 14th consecutive quarter the company has been in the red.

In its latest unaudited quarterly earning release, the Singapore consumer technology company said net loss for its second-quarter, ended Dec. 31, 2011, was an increase over the same quarter the previous year which saw a net loss of US$10.9 million.

This marks the 14th quarter Creative is in the red. The company last made a profit in the fourth quarter of its financial year 2008, when it registered US$116.2 million net  profit which included proceeds from the sale of its headquarters office building, according to a past earnings release in 2009.

Creative also reported a 14 percent quarter-on-quarter decrease in net sales in the second quarter of fiscal year 2012. It attributed the revenue dip to the "difficult market" for the company's products, in particular, the personal digital entertainment products.

The earnings release also highlighted a contract, with an unnamed vendor, which Creative's joint venture with Qala Singapore, called QMax, had terminated in the second quarter of financial year 2012. QMax had given notice to the vendor to terminate or cancel the supply contract "on the grounds of material breach of the contract and/or misrepresentations by the vendor". Creative said it had started legal process to recover the damages and losses related to the project.

Spending in research and development (R&D) in the second quarter also decreased by 38 percent, mainly because of cost-cutting actions in the fiscal year 2011. However, the company said it would continue to invest in product research R&D in areas that were strategic but cut back on those that were not.