HONG KONG -- Surface Mount Technology Holdings reported June quarter revenue of HK$435.3 million ($56.2 million), down 49.8% year-over-year, on slower demand.

The EMS provider, ranked 29th worldwide by the CIRCUITS ASSEMBLY Top 50, reported a net loss of HK$16.4 million ($2.1 million), down from a loss of HK$4.8 million a year ago.

Sequentially, revenue rose from 9.5% and the net operating loss decreased 25% on an increase in orders and continued cost control efforts.

For the quarter, gross margins improved to 12.7% from 10.5%, mainly due to lower material prices and energy costs. Net margin was a loss of 3.8% as compared to a loss of 0.6%. Capital investment was HK$11 million (1.42 million). The number of SMT lines remained at 152.

In a filing, the company said there are signs of some improvement, but the overall economic outlook for 2009 remains challenging. In China, the government's economic stimulus measures have begun to produce results, SMT Holdings said. An increase in orders at the end of the March quarter continued into the second quarter, and the company sees improving order forecasts from customers for both existing and new projects.