SINGAPORE -- Surface Mount Technology Holdings' September quarter net loss widened 9.5% to HK$13.8 million ($1.78 million) as higher wages at its China factories took their toll.

The contract electronics assembler said revenues rose 36% from last year to HK$588.7 million ($76 million).

Revenue dropped fell 9.5% quarter-to-quarter from HK$650.2 million on seasonal adjustments in air-conditioning and LED lighting businesses. The loss increased from HK$6.6 million, mainly due to higher wages in China. 

Industrial controls makes up 30% of the EMS company's sales, following by LED lighting (22%), computer peripherals (17%), and automotive electronics (14%). A/V and consumer combined make up 17% of sales.

In a statement, the company said the quarter was marked by a slowdown in the global economic recovery begun in June, and changes in China's manufacturing environment. "Manufacturing operations in China remain challenging. Central Government has announced a long-term policy to increase minimum wages annually and introduced more taxes. There are new requirements for companies to reduce energy usage and carbon dioxide emission. We are implementing measures to respond to the above developments."

"Customers are generally cautious about the market demand for the fourth quarter," SMT said. "The outlook for 2011 is still uncertain."

Ed.: HK$1 = US$0.129012