Foxconn Intl Loss Widens on Rising Costs

Foxconn International Holdings Ltd. said its first-half loss widened to 143 million U.S. dollars in the first six months.

Foxconn International Holdings Ltd., the world’s biggest contract maker of mobile-phones, said Tuesday its first-half loss widened amid the difficult global handset environment in 2010.

The net loss was 143 million U.S. dollars, compared with the 18.7 million U.S. dollars a year earlier, Foxconn said in a statement filed to the Hong Kong Stock Exchange.

Gross profit margin plunged 3.84 percentage points in the first half to 2.79 percent, the statement said. Meanwhile, first-half operating revenue increased slightly by 2.12 percent to 3.229 billion U.S. dollars, boosted mainly by income from the Asia market, which climbed 6.49 percent year-on-year.

The company largely attributed the widened loss to difficult global handset environment in the first six months of 2010.

“With intensifying market share shifts among global OEM brands, as well as gray market players, the industry remains volatile and challenging for players in the handset supply chain. As the result, the confluence of lower pricing for the Group’s products, changes in product mix, higher depreciation expenses and impairment losses affect the operating results of the Group,” it said.

It also noted in the statement that with European economic condition remains uncertain, the Group remains cautious over the future handset market growth and global consumer market conditions and the company’s main focus areas will be on cost control, resources consolidation and new customer business development.

Its clients include Nokia, Sony and Ericsson. Shares of the company dipped 1.59 percent to 5.56 Hong Kong dollars on Monday.