SINGAPORE - Cheung Woh Technologies plunged into a loss for the second quarter. It reported a net loss of S$5.9 million, reversing from earnings of S$1.9 million in the same period last year.

Revenue for the three months to Aug 31 fell by 35.4 per cent to S$14 million, mainly due to a drop in customers' demand for air-combs and the transition of phasing in the manufacturing of baseplates.

Cost of sales increased by 2.4 per cent, mainly due to inventory written-off, higher materials, labour and overhead costs. Inventory written-off was for baseplates that were damaged by heavy rainstorm caused by Typhoon Hato as well as baseplates that failed to meet customer's tightened specifications.

Higher materials, labour and overhead costs were incurred due to customer's tightened specifications leading to extra sorting and rework.

The additional costs were not passed on to the customer.

Loss per share amounted to 1.94 cents against earnings of 0.63 cent previously while net asset value per share eased to 33.23 cents compared to 35.97 cents as at Feb 28.

As for its outlook, turnover in the hard disk drive components segment will continue to be affected during the transitional period of phasing in the manufacturing of baseplates.

The transitional period is expected to end by the third quarter.

Cheung Woh has negotiated a higher selling price for baseplates, with the increase effective from Sept 1.