Metal casing maker Casetek Holdings Ltd (鎧勝) yesterday said its sales this year are likely to fall by a single-digit percentage from the NT$36.54 billion (US$1.22 billion) it posted last year, as sales of client Apple Inc’s iPad slow in developed countries.
The forecast predicts an end to Casetek’s three consecutive years of sales growth.
However, chief executive officer Gary Chuang (莊育志) said the company would continue to diversify its product range and expand its client base so it would be able sustain profitable growth for the year.
“We predict growth in worldwide demand for tablet shipments will flatten in the near future,” Chuang said in a conference call. “Therefore, we need to continue diversifying our product range, further improve yield rates and better control our operating costs to boost net profits during the second half of the year.”
Casetek supplies the metal casings used in notebooks and tablets to brands including Apple, Lenovo Group Ltd (聯想), Hewlett-Packard Co (HP), Dell Inc, Acer Inc (宏碁) and Asustek Computer Inc (華碩).
Chuang said Casetek sought new orders from clients that “were not producing products similar to the iPad” as the company wants to avoid causing a conflict of interest between clients, saying Casetek had been using different materials and technologies to manufacture new products.
Currently, its business with Apple represents more than 70 percent of Casetek’s total sales, which totaled NT$6.9 billion in the second quarter.
Other than making casings for tablets and notebook computers such as Apple’s iPads and MacBooks, Casetek also manufactures casings for wearable technology for Samsung Electronics Co and power banks for China’s Xiaomi Corp (小米), the company said.
Last quarter, net profits decreased 9 percent quarter-on-quarter and 20.8 percent year-on-year to NT$1.02 billion, or NT$3.01 per share, falling short of an analysts’ consensus estimate of NT$3.20.
Operating costs increased 4 percent to NT$597 million last quarter from NT$574 million a year ago because of a one-time write-off of inventories that “some original design manufacturers declined to use,” said chief financial officer Jonathan Chang (張昭平).
Chang said Casetek decided to write off part of its inventories last quarter because the move was necessary, adding that the company’s operating expenses are expected to stabilize this quarter.
Casetek did not provide guidance about its financial performance for this quarter, but said the company remains “optimistic” about prospects for the second half of the year, when new orders for Apple’s next-generation MacBooks are set to be the main driver.
To satisfy Apple’s demand for casings used in the MacBooks, Casetek plans to install 500 more computer numerical control (CNC) machines from next month, taking its total of CNC machines to 6,500 units from 5,000 it had last year, the company said.
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