Rising costs and soft export markets continue to plague China-based injection molder Deswell Industries Inc., with revenues dropping 16 percent to $54.1 million in its most recent fiscal year and losses mounting, the company said in a filing to the U.S. Securities and Exchange Commission.
Publicly traded Deswell, which has 360 presses at its factory in Dongguan, said its fiscal year ending March 31 was a difficult one, with losses rising to $1.99 million, up from $1.46 million the previous year.
The company, which is based in the Chinese territory of Macau and also does business as Jetcrown Industrial Ltd., put part of the blame on sluggish demand among customers in major Western export markets.
“Our customers in the United States are still feeling the effects of the economic downtown and are recovering more slowly than the markets there generally,” the company said. Its major markets include telephones, audio visual equipment and computer peripherals.
The firm also said rising wages in Dongguan are taking a toll on operations. CEO Frankie Tse noted in a statement that the minimum wage in Dongguan rose 19 percent this year and that the strengthening Chinese yuan hurt operations.
Still, the firm pointed to what it said were bright spots. It said one of its customers, Lenbrook Industries Ltd., became more than 10 percent of its business, evidence that its strategy of targeting existing customers for growth was paying off.
“We are confident, in spite of a challenging year, that we will be able to deliver improved performance in fiscal 2014 for our shareholders,” Tse said.