G-ITek said on Thursday it posted third-quarter consolidated revenue of 3.40 billion won and an operating loss of 2.71 billion won. Revenue fell 47 percent from a year earlier. The operating loss widened 87 percent from 1.45 billion won. Net loss came to 6.01 billion won, swinging from a year-earlier net profit of 79.26 million won.

Quarterly revenue fell after deliveries and inspections for some projects scheduled for September moved into the fourth quarter. The company said it recognises revenue when customer deliveries and inspections are completed.

Gross profit fell to 900.44 million won from 1.36 billion won as revenue declined. Selling, general and administrative expenses rose 29 percent to 3.61 billion won from 2.81 billion won, widening the operating loss.

For the first nine months, revenue totalled 23.07 billion won, staying at a similar level to 23.44 billion won a year earlier. That was helped by a 15 percent rise in first-half revenue from a year earlier. Cumulative operating loss was 2.72 billion won, about double the year-earlier 1.35 billion won. The third-quarter operating loss accounted for most of the cumulative operating loss.

Net loss included a 4.1 billion won loss from valuing foreign-currency assets. The company converts dollar deposits and accounts receivable received as export payments into won at the end-of-quarter exchange rate, and valuation gains recorded after a rise in the exchange rate at the end of the first half were reversed, with an additional valuation loss added. The company said the loss was not fixed through selling dollars and there was no cash outflow. It said the item falls under financial profit and loss, not operating profit and loss. Valuation could return to a gain if the exchange rate rebounds, but the amount of won actually received would fall if dollars are converted into won at a low exchange rate.

Even so, the company kept its financial structure at a stable level. On a consolidated basis, total equity fell 4.20 billion won to 92.93 billion won at the end of September from 97.14 billion won at the start of the year. That reflected a cumulative net loss of 3.44 billion won for January to September, along with 573.49 million won in dividends and a 183.53 million won decline from exchange-rate fluctuations. As of end-September on a separate basis, its debt ratio was 35 percent and its current ratio was 198 percent, and the company said it holds current assets worth about twice the liabilities due within a year.

It plans to continue expanding its business in the fourth quarter. In October, it signed a supply contract worth about 3.1 billion won for an automotive glass defect inspection system, extending vision inspection technology built up in secondary batteries and displays into auto parts. It was also selected as the lead company for an on-site technology research and development task by Korea Southern Power, and began localising key parts for equipment to reuse power generation wastewater. Its Indiana unit in the United States is set to operate based on local orders.

A G-ITek official said the company takes seriously its weak third-quarter performance. The official said a significant portion of the net loss was due to the effect of valuing foreign-currency assets after an end-of-quarter exchange rate fall and did not involve actual cash outflows. The official said the company will complete deferred customer deliveries and inspections without disruption and focus on restoring profitability by reviewing its cost structure, based on its financial structure with a debt ratio in the 30 percent range. The official added that it is also continuing customer support and new order efforts.