Cellnet Hit By Falling Sales
Sydney Morning Herald
Wednesday March 12, 2003
Mobile phone and accessories distributor Cellnet reported a big drop in sales and profits for the first half following a downturn in handset sales but said the worst was now behind it.
For the six months to December 31, revenue fell more than 18 per cent to $154.4 million, from $188.7 million previously.
Profits more than halved from $5.1 million to $2.2 million but this is after $2.1 million written off for obsolete stock.
``We're quite pleased with the result in the current environment," co-founder and managing director Stephen Harrison said.
While the sale of mobile phone accessories improved, the predominance of low-end customers meant the average price per phone dropped more than 21 per cent, the company said.
Telstra also favoured its internal sales team over external distributors like Cellnet, while the company also lost ground in a competitive market.
Strong sales growth from the company's IT wholesale division partially offset the $30 million fall in mobile phone revenues, which fell below $100 million.
Cellnet executives would not offer a forecast for the full year but said the outlook was improving. The introduction of new handsets and launch of 3G services from Hutchison Telecommunications, is expected to boost the market. Interim dividend was a fully franked 3c per share.
© 2003 Sydney Morning Herald
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