SEOUL, South Korea Pantech Co. Ltd., South Korea's second largest mobile phone maker, said it registered a net loss of 20.3 billion won ($20.7 million) in fiscal 2005 but expected more lucrative business this year.
Pantech said in a regulatory filing its total sales stood at 655.1 billion won ($667.6 million) with an operating loss of 42.3 billion won ($43.1 million).last year.
The poor performance was attributed to expenditures for a large-scale merger program and investment to set up new overseas sales networks. Pantech also cited lower-than expected sales of its revised product lineup and lackluster demand from many Koreans waiting for new handset subsidies from mobile telecom service providers.
The South Korean government is expected to ease a full-fledged ban on the subsidies during the first half of this year.
The company posted 891.5 billion won ($907.8 million) in sales, with an operating profit of 58.4 billion ($59.5 million) and a net income of 18.6 billion won ($19 million) in 2004. "But the comparison between last year’s results and fiscal 2004’s is meaningless, taking into account Pantech’s merger with Sky Teletech last December," a Pantech spokesman said.
Pantech became the country’s No. 2 mobile phone maker after the merger with Sky Teletech on Dec. 1, 2005. The "Sky" brand is one of the most popular premium brands here.
Meanwhile, Pantech said its 2006 guidance would include sales of 2.2 trillion won ($2.2 billion) by selling 12 million handsets, with 1.2 trillion won ($1.2 billion).to be earned through overseas shipments of 9.8 million phones.
The company plans to invest 180 billion won ($183.4 million) for R&D and another 56 billion won ($57.0 million) for expanding facilities this year, it added.