Creative

Creative: Creative's 2QFY15 net loss widened to US$9.2m from US$4.2m, on weaker revenue of US$31.3m (-17%), as uncertain and difficult market conditions continued to dog sales of the group’s products. Gross margin was relatively unchanged at 30%, in line with its product mix, while total operating expenses fell 8% to US$13.8m, due to reduced R&D expenses of US$4.9m (-22%) and cost cutting action taken by management. Bottom-line was dragged by other losses of US$4.6m (2QFY14: -US$0.4m), largely as a result of US$4.4m of FX losses and a US$0.7m impairment loss on investments. Prospects moving forward remain challenging, and management expects revenue to be lower in this quarter compared to 2QFY15, with the group expecting to bleed another operating loss. Perhaps the only consolation for the group is its net-cash position of US$103.3m, which translates to S$1.85 cash per share. At the current price, Creative trades at 0.77x P/B.