Thu, May 01, 2014 - Page 13 News List

Strong demand boosts Delta profit

OPPORTUNITY:Following Beijing’s announcement of subsidies for electric vehicles, Delta said it is ‘well-prepared’ to install charging stations in Chinese cities

By Helen Ku  /  Staff reporter

Delta Electronics Inc (台達電), the nation’s top supplier of power-supply units, yesterday reported that its first-quarter net profit hit the second-highest level ever at NT$4.57 billion (US$151.3 million) on the back of strong demand for industrial automation products.

The figure represents a 3.4 percent decline from the record-high NT$4.73 billion net profit in the fourth quarter of last year, but 9 percent growth from NT$4.19 billion the previous year, according to Delta’s latest financial statement.

Earnings per share during the January-to-March period were NT$1.87, compared with NT$1.94 in the previous quarter and NT$1.72 during the same period last year, the statement showed.

Thanks to a better product mix, Delta’s first-quarter gross margin hit its highest level of 26.6 percent, up from 26 percent the previous quarter and 25.6 percent the previous year, Delta investor services division manager Rodney Liu (劉致遠) said at an investors’ conference.

“Sales at all of the company’s business segments will increase this quarter on an annual basis, as we see demand for nearly every product, including those related to PCs, growing,” Delta chairman Yancey Hai (海英俊) said at the conference.

Hai’s remark implies Delta’s sales this quarter are forecast to achieve sequential growth from NT$43 billion last quarter and exceed the NT$43.4 billion posted in the same period last year.

Delta said sales of power electronics accounted for 61 percent of the company’s total sales last quarter, followed by those of energy management-related products at 18 percent and those of power-supply units used to generate renewable energy also at 18 percent.

The company said it plans to roll out more power-supply units for mid and high-powered industrial-automation products later this year in a bid to expand its market share.

Citing the company’s studies, Hai said the total market for power-supply units for industrial automation products is as large as NT$100 billion to NT$180 billion.

However, the market is dominated by German electronics giant Siemens AG, whereas Delta now has a less than 1 percent market share because of a lack of overseas sales channels, he said.

To strengthen the firm’s foothold in the industrial-automation market, Delta plans to increase its number of branches and service centers in China to 100 by 2017, from 40, Hai said.

Networking products are also expected to become a major sales driver this quarter, as many Chinese and Taiwanese telecoms prepare to launch 4G services, he added.

Hai said the firm is also “well-prepared” to install charging stations in China’s top-tier cities for electric vehicle owners, when asked to comment on Tesla’s recent entry into the Chinese market.

Delta is also looking to sell wall-mounted or portable chargers to electric vehicle drivers from this year, Hai said, forecasting the market would scale up in the long term as the Chinese government earlier this year announced it aims to address the air pollution issue by subsidizing purchases of electric vehicles.

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