March 21, 2013 / 3:15 PM / 7 years ago

Foxconn International posts biggest-ever loss in 2012

HONG KONG (Reuters) - Foxconn International Holdings Ltd (FIH), the world’s biggest contract maker of cellphones, fell into the red in 2012 with a net loss of $316.4 million due to weak orders from some of its major customers.

A worker leaves a Foxconn factory in the township of Longhua in Shenzhen, Guangdong province February 21, 2013. REUTERS/Tyrone Siu

The loss, the company’s biggest since its listing in 2005, was slightly smaller than an average estimate of $317.9 million from a Thomson Reuters I/B/E/S poll of 10 banks and brokerages.

FIH had reported a net profit of $72.8 million in 2011, it said in a statement on the Hong Kong stock exchange on Thursday.

“FIH’s fundamentals remain lackluster due to a lower-than-expected sales contribution from new customers (Amazon/Apple) and increasing low-margin orders from China smartphone customers (Xiaomi/Huawei),” Dale Gai, an analyst at Barclays Research, said in a report before the earnings release.

FIH also said it planned to change its name to FIH Mobile Ltd to avoid confusion with its unlisted parent Foxconn Technology Group.

The name change is subject to approval by shareholders and authorities in the Cayman Islands, where the company is incorporated.

FIH, which traditionally assembles products for clients including Nokia Oyj and Huawei Technologies Co Ltd, has struggled in recent years as many of its customers’ order books have shrunk.

Analysts have said the company had begun taking some Apple Inc orders from parent Foxconn Technology Group’s flagship unit Hon Hai Precision Industry Co Ltd, though the contribution to its bottom line is so far limited.

Foxconn has not confirmed these reports.

Shares in FIH, which has a market value of $2.8 billion, fell by a quarter in 2012 due to its poor financial performance. It announced its 2012 results after Hong Kong markets closed on Thursday, when its shares were down 0.3 percent, lagging the main Hang Seng index’s 0.1 percent fall.

Editing by David Holmes

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