Fri, Aug 09, 2013 - Page 13 News List

Casetek reports declining profit, margins

By Helen Ku  /  Staff reporter

Casetek Holdings Ltd (鎧勝), one of Apple Inc’s MacBook and iPad casing suppliers, yesterday reported declining profit and margins for the second quarter due to decreased orders.

The company said it was cautiously optimistic about its outlook for this quarter as new orders would help improve its utilization rate and lift sales and earnings.

During the April-to-June period, net profit fell 26.2 percent to NT$1.28 billion (US$42.79 million) from NT$1.74 billion in the first quarter of the year.

However, on an annual basis, the second-quarter numbers reflect a 120 percent growth from NT$586 million during the same period of last year.

Earnings per share last quarter were NT$3.79, down from NT$5.24 in the previous quarter, but up from NT$2.24 during the same period of last year.

In the second quarter, gross margin fell to 28.5 percent and operating margin dropped to 20.6 percent, from 33 percent and 25.5 percent in the prior quarter respectively.

However, as several of its clients, including Apple, are planning to ship new products from this quarter, the company reiterated that “there is no time for Casetek’s employees to rest during the second half of the year.”

After falling to a lower level last quarter, Casetek’s utilization rate is likely to bounce back this quarter and climb much higher in the fourth quarter, Casetek financial officer Jonathan Chang (張昭平) said.

With no plans to increase capital expenditure this year, which is about NT$100 million to NT$150 million per month, Casetek is outsourcing some of its orders to ensure the company’s resources, such as computer numerical control (CNC) machines, are efficiently used, Chang said.

“Casetek has enough cash in the book for plans to capacity expansion plans in the future,” Casetek chief executive officer Gary Chuang (莊育志) said. “However, because the market is undergoing dramatic changes that lead to shorter product cycles, the company has no plan to further increase capacity, in order to better control cost.”

Currently, shipments of casings used in tablets account for between 70 percent and 80 percent of Casetek’s total sales, while those used in laptops account for between 20 percent and 30 percent, the company said.

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