CMC Magnetics and Ritek, the top two makers of optical discs in Taiwan, as well as five second-tier producers all witnessed net operating losses for the first quarter of this year, ranging from NT$83.2 million to NT$441.1 million, according to the respective first-quarter financial reports published recently.
The five second-tier makers are Prodisc Technology, Gigastorage, Lead Data, Optodisc Technology and Princo.
The net operating losses were due to so high procurement cost of US$3.5 per kilogram for polycarbonate (PC), the makers pointed out. CMC and Ritek posted gross operating profit rates of 9.02% and 4.6%, respectively, while the five second-tier makers all had figures in the red.
Prodisc's application of the new accounting rules Accounting Standards for Asset Impairment (No.35 Statement) to its first-quarter financial report gave the company a total decrease of NT$1.043 billion in asset value. The other six companies had earlier adopted the new rules, with such losses from asset impairment already reflected in their 2004 financial reports.
As production capacities are fully or nearly fully occupied currently and prices of DVD+R/-R discs may be hiked by 5%-8%, these makers expect their operations to bottom out this quarter.
Story source:
digitimes.com.
