Sat, May 03, 2014 - Page 13 News List

Simplo beats Q1 forecast, rising 5.3%

EDGING AHEAD:The Hsinchu-based battery pack maker plans to raise salaries for workers after its US$25 million quarterly net profit exceeded its own estimate

By Lisa Wang  /  Staff reporter

Simplo Technology Co (新普科技), which supplies battery packs for Apple Inc’s iPhones, yesterday reported 5.3 percent annual growth in quarterly net profit for last quarter to NT$755 million (US$25 million), slightly surpassing the company’s forecast.

Three months ago, Simplo predicted that net profit would increase to NT$749 million last quarter. The Hsinchu-based company made NT$717 million in net income in the first quarter of last year. On a quarterly basis, the figure represented 26.77 percent decline from NT$1.03 billion due to seasonal factors.

This quarter, Simplo expected revenue to grow as much as 12.94 percent to about NT$13.7 billion, compared with NT$12.13 billion in the first three months of this year, as it recovers from a slow season.

Gross margin slid to 11.38 percent last quarter from 11.47 percent a year ago. The company set a goal to keep its gross margin above 11 percent this year by introducing more automation to its factories.

“We are seeing orders increase from the mobile phone segment and also from other information technology segments, including notebook computers,” company chairman and chief executive officer Raymond Sung (宋福祥) told investors.

“The third quarter will be an even better period than the second quarter in terms of ordering,” Sung said.

Simplo supplies battery packs to major PC makers including Lenovo Group (聯想), Dell Inc, Hewlett-Packard Co and Taiwan’s Asustek Computer Inc (華碩電腦).

The company’s earnings forecast for the current quarter slightly exceeds an estimate of NT$13 billion to NT$13.5 billion made by Daiwa Capital Markets analyst Steven Tseng (曾續良). Tseng said the growth momentum would be fueled by new product launches by PC vendors.

Pretax profit this quarter would grow about 8.67 percent and 12.75 percent sequentially to between NT$1.04 billion and NT$1.08 billion, but a higher tax rate would bring down the net profit to between NT$732 million and NT$753 million, the company said.

Simplo entered the smartphone battery pack market in the third quarter of last year, which became the new growth engine for the firm this year, the company said.

The company yesterday said it plans to raise employee salaries by 5 percent beginning this month.

Simplo’s board yesterday also approved a proposal to distribute a cash dividend of NT$6.8 per common share, based on last year’s net profit of NT$3.5 billion, or NT$10.5 per share.

Simplo shares surged 2.87 percent to NT$161.5 yesterday, outperforming the TAIEX, which rose 0.86 percent.

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