Thu, Oct 19, 2006 - Page 12 News List

BenQ Corp expecting to turn profit by next year

BETTER TIMES AHEAD The electronics giant said its Taiwan operations would be back in the black soon on the back of its LCD products, its general manager said

By Jason Tan  /  STAFF REPORTER

Hank Horng, associate vice president of BenQ, right, Lin Po-ting, deputy director of the National Palace Museum, center, and Manfred Wang, director of BenQ's Lifestyle Design Center hold up the new BenQ FP785+ LCD monitor during a press conference yesterday announcing a licensing agreement between BenQ and the museum.

PHOTO: WANG YI-SUNG, TAIPEI TIMES

BenQ Corp (明基) expects its Taiwanese operations to start booking profits next year, bolstered by its flat-panel television and monitor product lines, an executive said yesterday.

"We hope BenQ Taiwan's net income will post growth starting next year onward as we are losing money this year," said Hank Horng (洪漢青), associate vice president of BenQ.

Combined revenues of liquid-crystal-display televisions and monitors account for as much as 50 percent of BenQ's total local sales, Horng said. But he declined to reveal exact figures.

BenQ, also the nation's top handset maker, has seen its business in Taiwan decline over recent years, as consumers have given its handsets and notebooks, which account for around 20 percent and 15 percent respectively of total revenues, a lackluster reception.

"It has been a tough year in terms of the mobile phone segment ? and it will become harder to sell notebooks next year because of market saturation," said Horng, also BenQ Taiwan's general manager.

BenQ said earlier this month that it had lost at least 840 million euros (US$1.1 billion) with BenQ Mobile GmbH & Co, the handset business the Taiwanese company set up after purchasing the loss-making mobile phone business of Siemens AG last October.

BenQ is slated to release its third-quarter financial results on Tuesday, and is expected to talk about the future direction for its mobile phone unit as well as the separation of its brand and contract manufacturing businesses.

Meanwhile, BenQ said yesterday it plans to close 10 sales offices in Europe and Latin America, as well as a Brazil handset factory that it bought from Siemens.

"As we decided not to invest further in our German handset unit and the unit's holding company in the Netherlands, we will re-evaluate the financial situation of all subsidiaries under the holding company for possible closure," Eric Yu (游克用), BenQ's chief financial officer, said in a filing to the Taiwan Stock Exchange yesterday.

The impact of the decision to close them would be "minimal" to BenQ's operations, he said.

BenQ announced on Sept. 28 that it had decided to stop funding Munich-based BenQ Mobile in order to stem losses. The German unit filed for insolvency the next day.

The company said at the time that it was reviewing the financial position of its handset units in Brazil and other locations.

BenQ will rebuild its sales operations in some European and Latin American markets, while at the same time continuing business in Asia, China and India, which are less affected by the funding issue as they belong to the parent company.

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