Computer and handset peripheral products maker Primax Electronics Ltd (致伸), which in January completed the purchase of a 70 percent stake in speaker and digital audio equipment maker Tymphany HK Ltd, yesterday posted lower-than-expected net profit for last year.
Net profit fell 43.5 percent to NT$668.55 million (US$21.86 million) last year from NT$1.18 billion in 2012. Earnings per share were NT$1.55 last year, compared with the previous year’s NT$2.91 and lower than the market consensus forecast of NT$2.2.
The drop was due to an inventory write-off of NT$130 million and a NT$120 million impairment charge for idle equipment, which the company booked in the final quarter of last year, Primax said in a statement.
Significant weakness in the global PC market also dealt a blow to the company last year, Primax added.
The one-time charges caused the company to report net losses of NT$18.74 million last quarter, compared with a net profit of NT$202 million in the prior quarter.
Excluding the charges, the company would have reported net profit of NT$230 million last quarter and brought its full-year earnings to NT$920 million, or earnings per share of NT$2.13, Primax said.
“The impairment loss came from the company’s decision to stop investing in certain new technologies and products, which we had been working on for prospective clients over the past two years with no proven results,” the company said in a statement.
Primax did not elaborate on the names of its clients nor about the details of the prospective technologies and products.
The company’s major products are PC peripherals, which accounted for 45 percent of its total revenue of NT$42.32 billion last year, followed by mobile components at 40 percent and business equipment at 15 percent.
Among its mobile components, compact camera modules used in smartphones and tablets were the major item, contributing 70 percent to its mobile component revenue last year, with its clients including Apple Inc, HTC Corp (宏達電) and Chinese handset brands, the company said.
“Last year was an important year for the company in terms of client diversification, new product development, as well as mergers and acquisitions,” Primax said in a statement.
Primax acquired the 70 percent stake in Tymphany in October last year and is expected to start recognizing Tymphany’s revenue from this quarter, which the company said could contribute between 10 percent and 15 percent of its total revenue this year.
The company said it is upbeat about the outlook for this year and it is targeting an annual increase in revenue of about 20 percent, driven by strong growth from its mobile components and the addition of a new digital home business.
Primax said its board yesterday approved a proposal to distribute a NT$0.8 cash dividend per share, with a payout ratio of 51.61 percent. The proposed cash dividend is smaller than the NT$1.5 the company distributed last year.
Primax shares fell 0.47 percent to close at NT$32.1 yesterday, underperforming the benchmark TAIEX, which advanced 0.48 percent.