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Thu, Dec 04, 2008 - Page 10 News List

Qimonda parent Infineon posts loss of US$3.8 billion

AFP , FRANKFURT, GERMANY

The German semi-conductor group Infineon issued a gloomy report on Tuesday for itself and its loss-making memory-chip unit Qimonda, and posted an annual loss of 3 billion euros (US$3.8 billion).

The company now expects sales to decrease by at least 15 percent during the fiscal year that began in October and sees a “negative result” for the aggregate of its five divisions, a statement said.

It said “there can be no assurance that Infineon’s plan to further reduce its interest in Qimonda will be successful” and no assurance that Qimonda would be able to generate “adequate cash or result in desired operational efficiencies and cash savings.”

Shares in Infineon plunged by 23.36 percent to 1.27 euros in early trading on the Frankfurt stock exchange, while the DAX index was down by 2.07 percent overall.

The fourth quarter figures are “disastrous,” Dow Jones Newswires quoted a trader as saying.

Infineon said that sales had gained just 2 percent to 1.153 billion euros in the last three months of its fiscal year, and that core earnings had fallen into a loss of 220 million euros from 71 million euros in profit in the previous quarter.

Infineon’s share price has lost nearly 80 percent of its value in the last year.

The group had hoped to divest Qimonda, in which it owns a stake of 77.5 percent, by February.

In its last fiscal year, Infineon made a net loss of 3.1 billion euros, almost 10 times more than a year earlier and almost entirely the result of Qimonda.

Qimonda is searching desperately for an investor and has also asked for public aid.

Infineon has also dropped the idea of spinning off Qimonda by offering it to shareholders in the form of a dividend in kind, it said yesterday.

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