Sat, Mar 10, 2012 - Page 12 News List

Simplo posts its strongest profits in six quarters

BRIGHTER FUTURE:Next quarter, the firm’s revenue is expected to bounce back strongly -quarter-by-quarter, as customers start shipping new tablets and Ultrabooks

By Lisa Wang  /  Staff Reporter

Simplo Technology Co (新普科技), which supplies battery packs for Apple Inc’s iPad tablets, yesterday posted its strongest quarterly net profit figure in six quarters, as a result of gains in orders and customers.

Net income expanded about 27 percent year-on-year, or 5.9 percent quarter-on-quarter, to NT$1.07 billion (US$363.3 million) in the final quarter of last year, compared with NT$846 million in the same period of 2010 and NT$1.01 billion in the third quarter of last year, according to a financial statement released by Simplo, the world’s biggest notebook computer battery pack maker.

That resulted in an increase of about 11 percent in net profits for Simplo last year, to NT$3.69 billion, and earnings per share of NT$13.16, from NT$3.33 billion, or earnings per share of NT$11.88 in 2010.

“This year will be another great year,” company chairman and chief executive officer Raymond Sung (宋福祥) told investors yesterday. “The company’s earnings per share will be at least NT$10 this year.”

“We will also have quite good growth in revenue,” Sung said. “We are seeing growth in orders from existing customers as well as growth in new customers.”

Yuanta Securities (元大證券) last week forecast that Simplo would be one of the major beneficiaries from the launch of Apple’s new iPad, because a 70 percent increase in battery capacity is set to boost Simplo’s average selling price. Battery packs for the iPad accounted for 35 percent of -Simplo’s total revenue, Yuanta said in a report.

Simplo should achieve earnings per share of NT$15.9 this year, it forecast.

The global growth in laptops is expected to be between 5 percent and 10 percent this year from last year, Sung said. However, the growth in demand for tablets would far exceed that pace.

Simplo supplies battery packs to 30 clients in laptop and -tablet-related areas, covering all the major firms, except for Samsung Electronics Co, Sung said.

This quarter, net profit is expected to grow a maximum of 14 percent to reach NT$747 million from NT$657 million a year earlier. However, that would represent a quarterly decline of 30 percent, the company forecast, blaming seasonally slack demand.

Seasonality would also cut Simplo’s revenue by 9.3 percent to a maximum of NT$11.8 billion, compared with NT$13.02 billion in the fourth quarter of last year.

Next quarter, revenue would rebound by double digits -quarter-on-quarter, as some customers start shipping new products like tablets and Ultrabooks, Sung said. The third quarter would be even better, he added.

On the topic of new product development, Sung said Simplo was considering entering the lower--margin single-cell battery pack market at the request of customers.

However, the company would be selective in making single-cell battery cells, which are mostly used in mobile phones, as it gradually introduces automated systems to boost profitability, Sung said.

In the past, the market for -single-cell battery packs was small, making it difficult to make reasonable profits, he said.

Sung said the company had also made progress in expanding into battery packs for electric bikes and motorcycle makers. At present, the new business accounted for 2 percent to 3 percent of the company’s total revenue, he said.

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