Creative narrows H2 loss to US$4.4 million, but US tariff threat weighs on revenue

[SINGAPORE] Creative Technology posted a US$4.4 million net loss for the six months ended June, narrowed from the year-ago US$6.8 million loss, as costs fell with lay-offs.

The loss includes US$2.1 million in employee severance payments, after restructuring exercises. Earlier this year, it was reported that Creative laid off 14 per cent of its workforce.

Revenue for the half-year dipped 3 per cent to US$30.1 million – in line with the guidance Creative provided in July. The company had warned that revenue would be hit by tough macroeconomic conditions arising from the US tariffs.

The topline reduction was offset by an 8 per cent fall in expenses to US$14.2 million. Selling, general and administrative costs fell 9 per cent, after restructuring exercises reduced Creative’s headcount and lowered payroll.

The restructuring also led to Creative’s research and development costs falling 5 per cent to US$4.7 million.

For the full year, Creative posted a US$10.5 million net loss, slightly narrowed from the year-ago S$10.8 million loss, amid the introduction of new products.

The company’s full-year revenue rose 7 per cent to US$67.4 million – with US$63.2 million from the audio, speakers and headphone business, and the remainder from personal digital entertainment.

The topline grew across all regions, with net sales in the Asia-Pacific, the Americas and Europe up by 9 per cent, 3 per cent and 10 per cent, respectively.

Creative expects market conditions to remain challenging, especially with the threat of tariffs on semiconductor chips.

It said in its earnings statement: “These developments may contribute to inflationary pressures and dampen consumer sentiment, although the full impact on the macroeconomic landscape remains difficult to ascertain.”

Nevertheless, Creative believes that it is now leaner and “better positioned” to handle uncertainties after the restructuring exercise.

It is “cautiously optimistic” and expects a “steady improvement” in revenue and operating performance in the first half of 2026, as well as the full year.

Creative is currently led by Tan Jok Tin, its executive chairman, who is also serving as interim chief executive. He took over in July from Freddy Sim – the brother of Creative’s late founder Sim Wong Hoo – who stepped down from the top job after two months for health reasons.

Creative shares ended Friday flat at S$0.775.