VTECH HOLDINGS(00303)2022-11-28 09:06Financial Performance - For the first half of the fiscal year 2023, VTech Holdings reported a revenue increase of 4.5% to 1.1148 billion in the same period last year[2]. - The net profit attributable to shareholders rose by 6.6% to 77 million in the previous fiscal year[2]. - Gross margin improved to 28.3%, up from 27.4% in the same period last year, primarily due to a decrease in material costs and direct labor costs[2]. - Operating profit for the six months ended September 30 was 8.2 million from the previous year, with an operating margin of 8.5%[15]. - Total comprehensive income for the period was 82.0 million in the previous year, indicating a decline of 59.9%[25]. - The company reported a profit of 76.9 million for the same period in 2021, representing a growth of 1.4%[25]. Market Performance - North America remains VTech's largest market, accounting for 45.5% of total revenue, with sales in this region increasing by 6.5% to 266.5 million, driven by strong demand for the KidiZoom® camera series and new learning watches[3]. - The telecommunications segment in North America saw a revenue decline of 5.6% to 470.4 million, with electronic learning products' sales rising by 5.4% to 152.2 million, with all product categories showing growth[10]. Product Development and Innovation - New product launches, including the Level Up Gaming Chair™ and Clean Sweep Learning Caddy™, received recognition in holiday gift guides and toy awards[4]. - The company's electronic learning products received multiple awards, including the "Toy of the Year" for the Magic Adventures Microscope[8]. - Revenue from electronic learning products in the Asia-Pacific region increased by 6.9% to $41.9 million, driven by sales growth in Australia and Japan, offsetting declines in mainland China[11]. Strategic Initiatives - VTech has expanded its production facilities in Malaysia and Mexico to enhance competitiveness and prepare for future growth[2]. - The company announced an interim dividend of 17.0 cents per share, consistent with the previous fiscal year's interim dividend[2]. - VTech's strategy includes restructuring production bases to improve efficiency and global competitiveness, initiated since 2018[2]. - The company plans to invest in new product development and market expansion to drive future growth despite economic uncertainties[14]. Financial Outlook and Challenges - The company expects a complex and volatile operating environment for the second half of the fiscal year, with high energy costs and inflation persisting[14]. - The company has revised its full-year outlook, now anticipating a year-on-year revenue decline, while gross margins are expected to remain stable[14]. - Revenue for electronic learning products is now projected to decline for the full year, contrary to previous expectations of moderate growth[14]. Corporate Governance and Compliance - The company maintains a commitment to good corporate governance, emphasizing transparency, accountability, and independence[82]. - The company has complied with all corporate governance codes as of September 30, 2022, and has adhered to most recommended best practices[83]. - The risk management and internal control mechanisms have been continuously reviewed to ensure compliance with applicable laws and regulations[83]. - The company has implemented additional preventive measures and technical improvements to mitigate cybersecurity risks[83]. Shareholder Information - The company declared an interim dividend of 17.0 US cents per ordinary share for the six months ended September 30, 2022, to be paid on December 15, 2022[84]. - The company has a dedicated investor relations email: investor_relations@vtech.com[91]. - The company is incorporated in Bermuda with limited liability[91]. - The main registered office is located at 23rd Floor, Tai Ping Industrial Centre, Block 1, 57 Ting Kok Road, Tai Po, New Territories, Hong Kong[91].