FIH Mobile Limited provided earnings guidance for the six months ending 30 June 2024. For the period, the company expects realistic likelihood of a year-on-year decline in 1H 2024 sales, resulting in a deterioration of 1H 2024 gross profit; and that was likely to pose significant pressure on the Group's operating performance in 1H 2024, probably leading to sustained operating losses for 1H 2024. The Board informs the Company's shareholders and potential investors that, after further assessment of the Group's latest unaudited management accounts and other relevant information currently available (which are subject to possible adjustments following further internal review), the Company currently expects the Group to continue to record a consolidated net loss for 1H 2024 which is likely to be similar to or smaller than the Group's consolidated net loss of around USD 49.84 million for the six months ended 30 June 2023.

Because of the factors referred to below (amongst others), however, it is not reasonably possible at present for the Company to provide a more precise indication of the Group's likely interim results for 1H 2024. The Company will keep matters under close review as the second quarter of 2024 progresses, and will make further announcement(s) in compliance with the Listing Rules and/or the SFO, as appropriate. Various factors are expected to be relevant to the Company's likely 1H 2024 loss as mentioned above, including the following primary factors: (i) Suppressed consumer demand: the Group recorded a revenue of around, or above, USD 940 million for the current period, compared with around USD 1,209 million for the three months ended 31 March 2023 ("1Q 2023").

Apart from its sales to one major customer, its sales to other major customers declined during the current period. As the first several months of each year typically comprise low season for the industry in which the Group operates, the Group's performance in the first quarter is not necessarily representative of subsequent quarters. Although global supply chains and inflation appear to have stabilised after COVID-19 and the continuation of the Ukraine war, the global handset market continues to be adversely affected by various headwinds, including prolonged geopolitical tensions, slowdown of the general economy and slow economic recovery, limited visibility, inflationary pressure, high interest rates, commoditisation and increasing life cycle of smartphones.

Accordingly, it is currently anticipated that the Group's sales performance in the second quarter of 2024 will likely remain weak, although the Group has continued to focus resources on further eveloping non-mobile phone businesses, diversifying the Group's customer base and strengthening customer and business relationships, to seek to manage and mitigate future risks. (ii) Continuing adverse financial impact from the Group's under-utilised and unutilised assets, where the Group has been devising plans and implementing measures to address this as part of the Group's continuing rightsizing/restructuring activities, including possible disposal of any such assets, with a view to minimising their continuing adverse financial impact. iii) Increase in the Group's interest expenses (a total of USD 13.3 million for the current period, ompared with a total of USD 10.3 million for First Quarter 2023).

(iv) Even though the global handset market is expecting a low single-digit growth in smartphone shipments in 2024, as the global smartphone market has been saturated for some time, the challenging market conditions since late 2017 have continued into 2024.