Creative Technology

Creative Technology: 1QFY14 net loss increased to US$5.5m from US$4.5m in 1QFY12, while revenue declined 15% y/y to US$30.4m due to the uncertain and difficult market conditions. Gross margin increased 5ppts to 28% on the back of a change in sales mix towards higher margin newer products. Group recorded lower R&D expenses (-16%) due to the divestment of its subsidiary, ZiiLABS Limited, in 2QFY13. Creative expects no major improvements on the challenging market going forward, although sales are expected to be higher q/q on the back of the holiday season, which may result in an improvement in operations.