Sat, Jun 16, 2012 - Page 12 News List

Acer back on profit track: chairman

COMPENSATION:The company said it would restructure its executives’ pay scale after giving NT$1.28 billion in severance bonus to former CEO Gianfranco Lanci

By George Liao  /  Staff reporter

Acer Inc (宏碁), the world’s No. 4 PC brand, yesterday said it expected a major management overhaul and stricter inventory control to help it return to profit this year.

Next year, PC shipments would grow significantly, supported by the growing adoption of notebooks running Microsoft Corp’s new Windows 8 system and new-generation Ultrabooks powered by Intel chips, Acer chairman and chief executive J.T. Wang (王振堂) said at the company’s annual shareholders’ meeting.

With most of those new products hitting the market in the second half of this year, Acer’s revenue and shipment would increase from the first half, Wang said.

Shipments in the second half would account for 60 percent of total shipments this year, Wang forecast, implying 50 percent growth from the first half of the year.

“Acer’s operation is back on track,” Wang said. “This year will be a profitable year for Acer.”

Windows 8 laptops would be one of the major growth drivers for the company in the next three to five years, he added.

Last year, Acer’s worldwide PC ranking dropped to the fourth spot, with shipments of 39 million units, down 19.2 percent from 48.76 million units in 2010, according to market researcher Gartner’s tallies.

Acer posted a loss of NT$6.6 billion (US$220.5 million), compared with a net profit of NT$15.1 billion in 2010. It blamed the loss on high inventory write-offs from Europe, complicated product and branding strategies, major personnel shakeups and economic slowdowns in Europe and the US.

“After the departure of CEO Gianfranco Lanci, the company found an incredibly high inventory in the European channels, resulting in massive losses,” Wang said.

Acer reduced its inventory level to four to six weeks, from six to eight weeks, Acer president Jim Wong (翁建仁) said.

The company also expanded its inventory monitoring mechanism to include channel partners’ stock, Wong added.

The stunning NT$1.28 billion in severance and retirement pay that Acer paid Lanci also drew shareholders’ attention at the meeting.

It was an international norm for Acer to make the payment, Wang said, but admitted that it was “too expensive.”

Acer would make adjustments to its salary structure for top executives to seek a balance between compensation and safeguarding shareholders’ interests, he said.

Acer would take into consideration the company’s profit and share price when making the adjustment, he said.

Acer shares were unchanged at NT$30.90 yesterday, underperforming the TAIEX’s 1.14 percent rise.

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