ModeLabs Reports First Half Losses on Investments in Branded Handsets
French branded handset designer, ModeLabs has reported that its financial performance for the 1st half of 2008 has been affected by the major investment devoted to developing luxury mobiles, by the efforts devoted to optimising the Bluetooth division and by a contraction in the Group’s overall level of activity.
The company reported a net loss of €5.2 million, compared to a profit of €100,000 a year ago. Revenues dropped by nearly 30% to €75.3 million from €106.4 million.
As announced at the time of publication of the Group’s half-yearly revenue, a loss is anticipated for 2008 as a whole but 2009 is expected to see a return to profitability fuelled in particular by the investment in luxury mobiles. ModeLabs emphasises the strategic nature of this activity which has been initiated with two brands – Dior and TAG Heuer – and which will henceforth underpin the Group’s future growth and profitability.
As anticipated, the Group’s distribution operations achieved an improvement in profitability during the 1st half of 2008 despite a fall of 28.7% in revenue mainly reflecting increased competition from packaged offers by the telecom operators. By optimising purchases and sales and concentrating the product offer within the most profitable markets the company increased gross margin by 2.7 points to 15.9% of revenue for the 1st half of 2008 as compared with 13.1% for the 1st half of 2007.
“The strength of our worldwide deployment of luxury mobiles allows us to continue to forecast a return to profitable growth commencing in 2009”, declared Stéphane Bohbot, the chairman of ModeLabs’ executive board.
As at 30 June 2008 ModeLabs Group possesses net cash of €21.6m, an increase of €0.6m compared to 30 June 2007.
Posted to the site on 1st September 2008
