AU Optronics Corp (友達光電), the nation’s No. 2 LCD panel manufacturer, yesterday reported a smaller quarterly loss because of better cost control and a recovery in select panel prices.
The company recorded a loss of NT$13.8 billion in the first quarter, compared with a loss of NT$20.99 billion in the fourth quarter of last year. That figure is also smaller than a loss of NT$13.9 billion in the first quarter of last year.
“The first quarter will be the bottom and [demand] will gather steam gradually,” company president Paul Peng (彭雙浪) said during an investor conference. “Hopefully, the overall LCD industry will recover to a relatively healthy level from a six-quarter stalemate.”
Market demand is expected to pick up in the second half of the year, helped by PC replacement demand after the release of Microsoft’s Windows 8 operating system, as well as the launch of new tablets and smartphones, Peng said.
This year, global supply of LCD panels would grow 7 percent annually, while demand would increase 12 percent, he forecast.
For AU Optronics, shipments of TV and PC panels are expected to grow by 5 to 15 percent this quarter from 27.3 million units in the first three months, the company said.
Equipment loading rate is expected to rise to about 85 percent this quarter from last quarter’s 78 percent, the company said.
Average selling price would increase by up to 5 percent this quarter from US$649 per square meter in the first quarter, as the company plans to produce more higher-priced flat panels, it said.
AU Optronics is scheduled to ramp up production of high-resolution AMOLED panels used in mobile phones, Peng said.
The company does not have a timetable for producing AMOLED panels for TVs, Peng said, indirectly dismissing recent speculation that the company was in talks with Sony Corp to jointly produce AMOLED TV panels.
Gross margin improved to minus-8 percent last quarter, from minus-11.5 percent in the fourth quarter of last year.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, margin rose to 8.2 percent last quarter from 4.6 percent in the prior quarter, meaning the company strengthened its ability to generate cash from operations to invest in new technologies, the company said.
AU Optronics cut material cost by 4 percent quarterly and it expects to save 2 percent this quarter, chief financial officer Andy Yang (楊本豫) told investors.
The company kept its capital spending for this year unchanged at NT$40 billion.