Chi Mei Optoelectronics Corp (CMO, 奇美電子), the nation’s No. 2 flat-panel maker, yesterday posted its first quarterly profit in five quarters on strong demand for televisions in China, the company said.
The positive data support its decision to resume construction of a next-generation plant to meet fast-growing demand for slim-screen TVs, CMO added.
The Tainan-based company plans to increase its capital spending for this year by 11 percent to NT$45 billion (US$1.39 billion), from NT$40 billion originally budgeted, part of which will be used for the first installment on the NT$25 billion 8.5-generation plant.
“We are seeing positive signs,” CMO president Wang Jyh-chau (王志超) told investors in a teleconference. “Now we can afford higher capital spending [to fund capacity expansion] ... We feel customers’ strong demand for TV [panels] and we are aligning with our customers’ pace.”
The new plant, which will be used to manufacture liquid-crystal-display (LCD) TV panels, is expected to crank out 8,000 sheets of mother glass a month by the second quarter of next year, with the output tripling to 24,000 sheets by the end of next year, Wang said.
During the three-month period ending last month, CMO posted a net profit of NT$5.15 billion, or NT$0.69 per share, from a loss of NT$8.84 billion in the previous quarter and a loss of NT$4.19 billion in the same period a year ago, ending four straight quarters of losses as the global economic turmoil curtailed electronics spending since last fall.
CMO beat the expectations of most analysts, including Credit Suisse’s Felix Rusli, who predicted earnings of NT$0.33 per share.
Shrinking the gap with first-tier players, CMO enhanced its EBITDA margin to 27.4 percent last quarter from 14.2 perent in the previous quarter, slightly lower than the 27.9 percent posted by the nation’s top panel maker, AU Optronics Corp (友達光電).
CMO’s gross margin improved to 12.4 percent last quarter from minus 3.7 percent in the second quarter as recovering demand helped drive up its average selling price by 13.2 percent quarter-on-quarter to US$120 per unit, the company said.
Looking ahead, CMO said it was more optimistic than it used to be after some customers’ inventories dropped very low amid a stronger-than-expected recovery, exemplified by robust TV sales during the October Golden Week in China.
As usual, the fourth quarter was likely to be slightly weaker, CMO said, with shipments of PC and TV panels expected to drop slightly from a record of 21.66 million units in the third quarter.
Equipment load may slide to 90 percent, from last quarter’s utilization rate of between 90 percent and 95 percent, company spokesman Denis Chen (陳世賢) said.
However, TV panel shipments are expected to surpass growth in other business segments, with shipments set to increase by between 10 percent and 15 percent quarter-on-quarter, Chen said, citing sustained demand in China ahead of the Lunar New year shopping season.
Prices for TVs may be flat or slide by 5 percent quarter-on-quarter this quarter, Chen said.
TV panels are CMO’s biggest revenue source, making up more than 50 percent of the company’s total revenues of NT$89.44 billion last quarter.
PC panel shipments, however, may decline by between 15 percent and 20 percent quarter-on-quarter in the last quarter of the year, while prices could decrease at a quarterly rate of between 5 percent and 10 percent, the company said.
RSS