Thu, Nov 02, 2006 - Page 12 News List

Simplo reports big rise in profits on back of Sony recall

By Jason Tan  /  STAFF REPORTER

Simplo Technology Co (新普科技), the world's second-largest maker of battery packs used in laptops, yesterday posted a strong rise in profits for the first three quarters on increased orders.

The company's net income for the first nine months of the year rose 35 percent to NT$914.7 million (US$27.5 million), or NT$6.58 a share, compared to NT$675.8 million, or NT$5.38 per share, for the same period last year.

"The third quarter is traditionally a busy period and we saw strong demand from clients," Simplo's spokesperson Jackie Ding (丁惠敏) told a press conference yesterday.

The company's sales in the January to September period rose 42 percent to NT$11 billion, while its gross margin rose to 15 percent, from 14 percent last year.

Simplo received a boost in orders last quarter when Dell Inc ordered urgent shipments of 400,000 battery packs after the world's second-largest PC maker announced on Aug. 14 a recall of 4.1 million Sony lithium-ion batteries used in its laptops.

Simplo will benefit from strong client demand, as tight battery supplies will only be relieved by the first quarter next year, said Raymond Sung (宋福祥), Simplo's chairman and CEO.

The company will be able to meet its target by shipping a total of 16 million laptop battery packs this year, up from last year's 11 million.

Shipments are expected to rise to 20 million next year, the company said.

Fourth-quarter sales are projected to rise by at least 8.5 percent to NT$4.9 billion, according to Simplo. Next year's sales will rise to between NT$20 billion and NT$22 billion, up from this year's estimated sales of NT$16 billion, it said.

Battery-pack certification for a new Japanese notebook client is currently underway and shipments will hopefully start in the first quarter next year, according to Sung.

The company has been working on diversifying its product applications to cover the non-notebook battery segment, such as smartphones, personal digital assistants, global positioning system products as well as power tools.

It intends to raise the new segment's revenue contribution to 15 percent by 2008 from the current 5 percent.

Simplo's shares closed up 1.6 percent to NT$95.1 on the Taiwan Stock Exchange yesterday.

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