TCL Corporation: stable sales in the first quarter and success for LCD screens

On 25 April, TCL Corporation unveiled its results for the first quarter. The report shows that the company earned 802.176 million euro and that revenues generated by sales amount to 786.582 million euro. As for the net profit, it is 1.554 million euro. Still in the first quarter, TCL completed positive financial transactions amounting to 46.875 million.

According to the report, the company has implemented its strategy for the “Development of the Chinese market and the principal overseas markets”. This has returned positive results nationally, with growth of 5.7% in income compared with last year. TCL Corporation has bolstered risk control for its overseas markets, which has enabled it to make more profit from them. This increase in profits from one year to the next is the result of 35.650 million euro extra generated by the sales of the low voltage electrical appliance line compared with the same period last year and 7.106 million euro earned thanks to convertible bonds. Non-recurring revenues also made a large contribution to net profits in the first quarter 2008. In addition, the global financial crisis affected TCL's telecommunications sector overseas. This returned a loss compared with last year.

“Faced with pressure and challenges, the company applied its strategy by boosting domestic demand and developing its overseas markets at the start of the year. This strategy has enabled it to maintain its stability during the financial crisis,” noted Mr Li Dongsheng, Chairman of TCL Corporation. “The company is doing well at the present time. Our sectors of business are returning a positive operating performance. We have noticed great improvement in stock management and the supply chain. All of these factors will enable TCL to play an active role in facing up to the financial crisis.”

The bottom line for the first quarter also shows that the multimedia electronics market has undergone sustained growth with a total of 2.421 million sales. LCD screens represent half of this figure with 1.199 million units sold. This is an increase of 122.4% compared with last year. In China, sales have gone through the roof with a rise of 235.3% compared with last year while the overseas markets grew by 40.4% in the same period. In the audio/video sector, the company secured major orders from loyal customers and has also clinched new contracts. This has led to growth of 1.6% compared with last year. Moreover, the influence of Blu-ray and HD DVD products is such that TCL Corporation is expecting a high demand for them in the near future.

Since the financial crisis has eroded demand and reduced the rate of replacement, the telecommunications sector is flagging. In the first quarter, the company sold 2.276 million telephones and SIM cards, which represents a shortfall from one year to the next. On the other hand, the Chinese market grew by 84% for this same sector. In March, TCL Corporation took a series of measures in response to the shortfall in sales. These nonetheless showed an apparent improvement in February. Since March, total sales have increased by 61.44% from one month to the next. Overseas sales also increased by 46.32% from one month to the next.

TCL Corporation points out that, in spite of the financial crisis, the company was able to anticipate the situation and earmark enough cash flow. This strengthened its ability to react to the crisis and obviate any risks. Moreover, efficiency and improvement in the production structures will be one of the keys to its growth. Recently, the company officially increased its capital with investments from private funds. They come from shareholders who had staked their money on large and small LCD module projects. To accommodate the rapid growth of its screen sales, TCL Corporation has stepped up productivity. From January to March 2009, 79,672 modules were produced and a second manufacturing line will begin mass production in April. This proves that the company is no longer counting on anticipated imports of LCD modules. The improvement in productivity alone will not be sufficient however to lower costs. It will be necessary to step up the new product offer, improve design and reduce logistics costs. All of these measures will enhance TCL's competitiveness.

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