HUAN Hsin Holdings, a contract manufacturer of telecommunications and electronic products, was hit by a triple whammy of higher raw material, staff and finance costs in its first half-year.

This resulted in the group posting a 17 per cent fall in net profit to $12 million for the six months ended June 30 - from $14.4 million in the previous corresponding period - despite a 41 per cent jump in revenue to $292.4 million from $207 million.

The revenue growth was driven by higher orders for products such as notebook casings, notebook peripherals and fax machine components, said Huan Hsin. Also helping were new products such as printer casings and laser printer cartridges.

Notebook casings continue to be the group's largest revenue generator, accounting for 45 per cent of H1 turnover.

Shipments of notebook casings rose by 28 per cent to 4.6 million units, compared with 3.6 million units in the previous H1.

Huan Hsin also said it added one new customer to its portfolio, making it the leading notebook casing supplier globally, with five major notebook manufacturers as its clients.

But profitability was hit as raw material costs rose, 'partly due to turnkey orders for notebook peripherals, where procurement of components and raw material are borne by the group'.

Staff and finance costs rose by 53 per cent and 71 per cent respectively mainly due to higher headcount and increase in bank loans for working capital and new plants.

Still, the group said it 'remains optimistic' about its notebook casing business.

And it expects order momentum for other products to remain strong as it enters the second half of the year, which the company said is a period with stronger seasonal demand.

The directors proposed a tax-exempt interim dividend of one cent per share, up from the previous H1's 0.8 cent.

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The Business Times