Losses continue to dog sound card maker Creative Technology

Sound card maker Creative Technology has reported a widening of its first quarter net loss to US$5.5 million (S$6.9 million) from US$4.5 million in the same period last year.

Revenue for the three months to Sept 30 shrank by 14.9 per cent to US$30.4 million.

This was due to the uncertain and difficult market conditions which continued to affect the sales of the group's products.

Gross profit margin was 28 per cent, improving from 23 per cent previously. The

higher gross profit margin was in line with the sales mix.

The write-down for inventory obsolescence was for certain existing products following the introduction of new product models.

Loss per share worsened to eight US cents from six US cents previously while net asset value per share fell to US$2.24 compared to US$2.32 as at June 30.

Net loss in the quarter included other gains (net) of US$1.4 million, compared to other

gains (net) of US$4.9 million in the corresponding period last year.

Research and development expenses decreased by 16 per cent, due mainly to costs savings resulting from the divestment of a subsidiary company, ZiiLABS, in the second quarter of the last financial year.

On its prospects, Creative expects no major improvement in the difficult and uncertain market conditions. The overall market for its products remains challenging.

However, revenue is expected to be higher for the holiday season in the coming quarter compared to the current level and the group expects a similar improvement in operating results.