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EUCON Holding, which released its second-quarter results yesterday, said that it remains in breach of certain financial covenants on outstanding loans and that its ability to remain as a going concern is uncertain as this still hinges on its ability to rely on banking facilities in the foreseeable future.
The company, an integrated printed circuit board (PCB) solutions provider for PCB manufacturers in China and Taiwan, reported a net loss of $6.0 million for the second quarter ended June 2009, mainly attributable to high fixed costs and an additional provision of doubtful receivables amounting to $0.9 million. In 2Q08, it had a net profit of $2.4 million. 2Q09 revenue dived 50 per cent to $18.8 million.
Q2 loss per share came to 1.02 cents compared with earnings per share of 0.39 of a cent a year ago.
It decided to 'upgrade its caution to shareholders and investors' in light of the continuing credit tightness, the substantial loss incurred in the first half of 2009, and the poor business prospects, it said.
As at 2Q09, the group has outstanding loans of $6.1 million. Eucon said it is fulfilling its repayment obligations and the relevant banks were aware of the breaches. 'To date, nothing has come to our attention that these banks will demand immediate repayment.'
The group said it is taking steps to improve its liquidity position, which includes adopting cost-cutting measures and evaluating alternative sources of financing.
Group revenue declined by 50 per cent to $18.8 million in 2Q09 compared with $37.8 million in 2Q08. The decrease was due to weak demand for electronics products as a result of severe global slowdown and reduced consumer spending.
Sales from PCB operations in China in 2Q09 decreased by 44 per cent. This segment remained as the key contributor to the group's revenue. Revenue from mechanical drilling and routing services decreased by 48 per cent while revenue from laser drilling services decreased by 78 per cent.
For the first six months, net loss was $10.9 million, against a net profit of $535,000 for the year-ago comparative period. H1 revenue was $30 million, a fall of 54 per cent.
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