TCL Multimedia Technology Holdings Ltd., which reported a nine-month loss of HK$1.52 billion ($195 million), said it will shut its European unit formed with France's Thomson SA in an effort to return to profit.

The cost, mainly for severance pay, of the reorganization will be about 45 million euros ($57 million), the Hong Kong-based company said in a statement.

TCL Multimedia joins Asian companies such as Lenovo Group Ltd. and Taiwan's Benq Corp. in posting losses after making overseas acquisitions. Parent TCL Corp. forecast a second straight net loss this year as Chairman Li Dongsheng struggles to turn around the unprofitable TV business TCL bought from Thomson in 2004 to form TTE Corp., the world's biggest TV maker.

TCL Multimedia said European revenue will fall in 2007 from 2006 before recovering in 2008. The new structure will reduce operating costs drastically, and "pave the way" for a return to profitability for the operations in 2008, according to the statement.

TCL Corp., China's biggest publicly traded consumer- electronics maker, and Thomson agreed to merge their TV and DVD- player units in November 2003, creating TTE. The company was established mainly with assets for the production and sale of traditional cathode ray-tube TVs at a time when consumers demand was switching to flat-panel sets.

For the third quarter, TCL Multimedia returned to profit as its flat-panel TV sales posted a "strong" increase from a year earlier, the company said this month.

Net income for the quarter was HK$81 million ($10.4 million), compared with a loss of HK$179 million a year earlier, the company said. Sales fell 11.5 percent to HK$6.9 billion as demand for TCL's cathode ray-tube TVs, the biggest contributor to revenue, continued to decline.

Source:佚名