Bangkok--23 Feb--JayDee Partners
Magnecomp Precision Technology announced results for Q4’06, significantly improved from the previous quarter, suspension shipments increased 7%, sales increased 2% and net loss reduced by 56% from Q3’06 to Bt. 66.4 million. The company believed that the Company’s restructuring in 2006 which they took several strategies i.e. cost reduction, streamline the operations will help the Company turnaround in 2007.
(February 23, 2007) Mr. Steven Campbell, Chief Executive Officer of Magnecomp Precision Technology had announced the financial performance of Q4’06 and full year ended 31 December 2006, the Company continued to make progress as net loss narrowed by 56% from Baht 151.7 million in Q3’06 to Baht 66.4 million, representing the second consecutive quarter of improvement. During Q4’06 MPT shipped a record 92.4 million suspension assemblies during Q4’06, up 7% from 86.6 million suspension assembly in Q3’06 and a 4% increase from Q4’05. Despite the higher shipments, the Company’s sales declined 11% to Baht 2,473.2 million compared to Baht 2,784.6 million in Q4’05. The fourth quarter sales were primarily impacted by the unfavorable translation impact of the stronger Thai Baht on U.S. dollar-denominated revenues.
We continued to make progress as our second consecutive quarter of narrowing losses following a quarter in which we saw record shipments. Our suspension shipments included significant volume for PMR (Perpendicular Magnetic Recording) drives targeted for high-capacity server and multi-platter consumer applications. These rapidly growing consumer applications include personal video recorders (PVRs), high-definition television (HDTV), gaming and other home entertainment devices.” Mr. Steven Campbell said
For FY2006, MPT recorded sales of Baht 9,592.2 million and increased of Baht 132.2 million compared to sales of Baht 9,459.9 million for FY2005. The Group reported a net loss of Baht 898.4 million or net loss of Baht 0.43 per share for FY2006, compared to a net profit of Baht 553.8 million or net profit of Baht 0.32 per share for FY2005. The weaker results include restructuring and severance charges of Baht 651.7 million incurred during Q2’06 mainly associated with the planned of the Dongguan plants in China and provisions related to the impairment of fixed assets associated with older products and technologies. The Group’s FY2006 financial performance was also adversely impacted by the unfavorable translation impact of Thai Baht on U.S. Dollar denominated revenues. In order to mitigate the foreign exchange risk, we have done some hedging in 2007.
“2006 was a year of restructuring and consolidation for MPT during which we took several strategic actions to help us return to profitability. We restructured the Group in an effort to right-size our cost structure, streamline our Group’s operations and better utilize our assets. We also downsized our involvement in our non-core suspension business through the sale of tooling fabrication machines to MQ Technology Berhad in December 2006 which is resulted in a net gain of Baht 27 million. These initiatives will help the Group turnaround in FY2007. Additionally, we plan to continue to enhance our product offerings, and maintain our focus on reducing costs. These steps, which will strengthen our relationship with our customers, are expected to improve the Group’s performance,” concluded Mr. Campbell.
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