The effect of the Southeast Asian financial crisis on IT sales will be even worse in the second half of the year than it was in the first half, according to officials from Hewlett-Packard.
HP saw a 20 per cent slump in regional sales in US dollar terms for the six months to April 30, 1998, and expects "slightly weaker" performance in the second half. This represents the first drop in sales in 10 years, according to HP's managing director for Singapore and Southeast Asia, Cheah Kuan Huat. HP has posted 35 per cent annual sales growth in the region over the last six years.
Singapore was the only bright spot, posting 7 per cent growth for the first half of the year, HP officials said, while Thailand, Malaysia, the Philippines and Indonesia floundered.
The second half of 1998 should mark the bottom of the sales curve in the region, HP said, and the challenge was to remain profitable by trimming operating expenses.
Southeast Asia accounts for 3 per cent to 4 per cent of HP's global revenues, with Asia-Pacific as a whole accounting for 16 per cent. Despite strong performance by its operations in Australia, Asia-Pacific revenues are expected to fall in the second half of the year, HP said.