January 23, 2013 / 11:00 AM / in 5 years

UPDATE 1-Foxconn International flags net loss in 2012

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HONG KONG, Jan 23 (Reuters) - Foxconn International Holdings Ltd (FIH), the world’s biggest contract maker of cellphones, said it expected to record a net loss in 2012 as a result of lower demand from some of the group’s major customers.

FIH, which traditionally assembles products for key clients including Nokia Oyj, but not Apple Inc, has struggled in recent years as many of its customers’ order books have shrunk.

Its parent, Foxconn Technology Group’s flagship unit Hon Hai Precision Industry Co Ltd , declined to comment in November on brokerage reports saying FIH may have taken on some production of Apple products.

In a statement to the Hong Kong stock exchange on Wednesday, FIH said its net loss for the second half of last year was expected to be smaller than the group’s first-half net loss which came in at $226.07 million, its worst ever first-half performance.

For statement, click here

Reporting that loss in August, FIH gave a cautious outlook for its business, saying price competition has led to narrowing margins among mobile phone vendors fighting for market share.

FIH warned at the time that uncertainties in global handset demand were dimming its prospects and said management would focus on cutting costs in the handset sector.

Shares in FIH, which fell 25 percent in 2012 to record their third successive annual loss, are expected to take a hit when they open in Hong Kong on Thursday.

The stock closed down 0.8 percent on Wednesday, lagging a 0.1 percent drop in the benchmark Hang Seng Index. (Reporting By Anne Marie Roantree; Editing by Daniel Magnowski)

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