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Creative Technology in the black in Q4 on gains from lawsuit award against Huawei
CREATIVE Technology was back in the black in the fourth quarter, fuelled by millions of dollars in "other gains" from litigation settlements.
Net profit came in at US$25.6 million for the three months to June 30, reversing the previous US$5.5 million loss, according to unaudited financial results out on Friday. Revenue slipped by 3 per cent year on year to US$14.1 million.
Creative had said in May that it expected to recognise some US$32 million in income for the quarter after the Singapore appeals court made a final decision in its favour, in its legal proceedings against Chinese technology giant Huawei International, over a scrapped wireless broadband network project.
Earnings per share was US$0.36 for the quarter, against a prior loss per share of US$0.08, while net asset value rose to US$1.61 a share, compared with US$1.06 previously.
On the back of various legal settlements, net profit for the full year was US$40.4 million, a comeback from a net loss of US$22.9 million, while revenue fell by 5 per cent to US$66.1 million.
Still, the company warned that it expects to report an operating loss for the present quarter (Q1 2019) with revenue "expected to be comparable to the current level".
"For the current financial year, the group expects no significant change in the market conditions and overall market for the group's products remain challenging," Creative said in its outlook statement.
But it added that sales of its Super X-Fi (SXFI) headphone technology - which inspired a 600 per cent share price rally over seven sessions in March, on awed analyst reports - are "expected to provide good revenue growth opportunities for the current financial year".
"SXFI was announced in the third quarter of FY2018 and has received overwhelming reception. We expect to commence volume shipment of the new SXFI products from the next quarter (Q2 FY2019)."
No dividend was recommended for the quarter, unchanged from the year before.
Creative shed S$0.02, or 0.33 per cent, to S$5.99, before the results.