Creative Technology's High Profits (Full Version)

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SiliconFreak -> Creative Technology's High Profits (8/4/2004 4:52:54 PM)

SINGAPORE : Creative Technology has chalked up impressive full-year results on the back of surging revenues from personal digital entertainment products, as well as investment gains and tax write-back.

Creative's full-year net income was up almost six-fold to US$134 million, or S$231 million, with sales rising 16 percent to US$815 million.

Excluding investment gains of US$72.6 million and a tax write-back of US$12.2, Creative recorded a full-year net income of US$49.4 million, compared with US$29.4 million before exceptionals in the previous fiscal year.

For the first quarter of its new financial year, Creative is targeting a revenue rise of 25 to 30 percent to between US$200 million and US$210 million.

Creative's top revenue earner was its personal digital entertainment, or PDE, business unit.

The company intends to raise its global PDE market share from the current 10 percent.

"Our strategy in this market is what the Chinese say, 'tar siao tong che' -- big small, all eat. I think we have worked very, very hard in this market, so like the sound card, where we actually dominate market, we'd like to be the number one in this market," said Sim Wong Choo, Creative's chairman and CEO.

To achieve this, Creative will raise its spending on PDE research and development significantly.

"I think our Sound Blaster is way, way too strong. We are so dominant out there, we are the only player left right now in terms of investing in any kind of R&D. We are five, six or seven generations in terms of chip design, audio chip design against any competition out there. So we are the king of digital audio technology," Mr Sim said.

"So right now, instead of investing a lot more in the market that we are so dominant in, we would like to shift this R&D resources -- part of it, not all -- into PDE, especially the digital audio player areas because this market is huge and the revenue is growing," he said.

Creative plans to ship one million units of PDE per month by year-end.

PDE revenue more than tripled in the last financial year, helping to drive overall revenues beyond the high end of the company's expectations.

Source : CNA

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