Delta Electronics Inc (台達電), the world’s top manufacturer of switching power supplies, yesterday said it expects sales to rise by double digits this year as a result of industrial automation and tablet PC adapter sales.
However, gross margins will inch down by between 1 percent and 2 percent, after such factors as currency fluctuation and the rising cost of new materials are taken into account, vice chairman and chief executive Yancey Hai (海英俊) told an investors’ conference.
The company is taking -counter--measures by negotiating for higher prices with customers and adjusting its product mix, he said.
Delta, which supplies power adapters to Hewlett-Packard Co and for Apple Inc’s notebooks, reported a 38 percent rise in revenue last year to NT$171.3 billion (US$5.8 billion).
However, the gross margin was 21.4 percent last year, down slightly from 21.6 percent a year earlier, according to company statistics.
Net income was a record NT$15.75 billion, translating into earnings per share (EPS) of NT$6.69. That was an increase of 35 percent on 2009, when reported earnings were NT$11.66 billion, with an EPS of NT$4.95.
The power supplies maker established its industrial automation division in 1995, but the business only took off in recent years thanks to booming demand from emerging markets such as China and India. In those countries, the pursuit of industrialization requires automation solutions for factories, for example for speeding up or standardizing the production of food and packaging.
Delta is selling components and modules used for industrial automation — such as inverters, converters, drivers and motors — and aims to become a one-stop provider offering automation solutions that help clients program and manage all their operations.
Industrial automation business accounted for 8 percent of Delta’s total sales last year, up from 6 percent in 2009, company statistics show.
The company is aggressively expanding industrial automation channels in China, which currently account for 50 percent of its industrial automation business, Hai said.
The company also announced yesterday that it plans to spend US$161.8 million to boost its stake in Delta GreenTech (China) Co (中達電通) from 10 percent to 48.5 percent.
The move will allow the firm to obtain 400-plus existing Delta GreenTech channels, Hai said, adding that the number would expand to more than 500 by the end of the year.
Delta is also set to ride high on the growth of the tablet PC market this year as more players enter the market.
“We have a good position in tablets. There are not many manufacturers that could ramp up production by a million adapters at short notice,” Hai said.
The company yesterday also proposed the payment of a NT$5.2 per share cash dividend, which amounts to 4.11 percent of yield rate based on its closing stock price of NT$126.5.