The nation’s top touchpanel maker, TPK Holdings Co (宸鴻), yesterday reported a third-quarter net loss of NT$241 million (US$7.92 million), or NT$0.73 per share, but said its business would start to perform better this quarter.
Last quarter’s figures compared with net profits of NT$1.01 billion, or NT$3.06 per share, a year earlier and NT$323 million, or NT$0.98 per share, in the previous quarter.
Gross profit decreased by 20.8 percent quarterly to NT$2.17 billion in the past quarter, which TPK president Tom Sun (孫大明) attributed mainly to delayed product launches by one of its clients.
“We hired more than 7,000 employees to shore up orders, but the client unexpectedly delayed the sales of the product for months. As a result, we had to suffer the expenses of personnel recruitment and wait until shipments were settled,” Sun told investors on a conference call.
The company also witnessed a decline in gross margin as it worked to improve its yield rate after adopting new touchpanel technologies, with margin declining 2.3 percentage points from the previous quarter to 6.6 percent.
“However, our yield rate has started to improve from about 40 percent to more than 70 percent. We expect that the improving yield will contribute to a better fourth-quarter performance,” Sun said.
Despite a net loss last quarter, the company said it would still make a profit this year, as business is set to rebound this quarter and extend into next quarter in the wake of higher product shipments and improving yield rate.
In the July-to-September quarter, TPK reported consolidated revenue of NT$32.61 billion, up 6.2 percent from the second quarter.
Sun said the increase was due to continuing demand for smartphones, large tablets and notebook computers, adding that robust demand is set to persist this quarter.
TPK said demand for 11-inch to 16-inch tablets is better than expected, boosting the company’s sales for such products by 35 percent quarter-on-quarter last quarter, while touchpanel sales for all-in-one PCs and 16-inch or bigger products also increased 27 percent from the previous quarter.
However, sales of touchscreens for 7-inch to 11-inch tablets stayed flat last quarter from the second quarter, Sun said.
The company yesterday again denied market speculation that Hon Hai Precision Industry Co (鴻海精密) could invest in TPK, but noted that local peer Wintek Corp’s (勝華科技) court filing for financial restructuring had raised investors’ attention on its financial status.
TPK chief financial officer Freddie Liu (劉詩亮) said as of Sept. 30, the company possessed NT$25.4 billion in cash and debt equivalents of NT$61.1 billion — including long-term debt of NT$7.9 billion and short-term debt of NT$53.2 billion.
“Our debt ratio has increased against declining profits this year, but our performance has started to rebound since September,” Liu said, stressing that the company’s financial status is still healthy.
In the first nine months of this year, TPK sales totaled NT$89.93 billion, down 23.25 percent from last year’s NT$117.18 billion.
TPK shares plunged 6.37 percent to NT$147 yesterday in Taipei trading, ahead of the company’s conference call.
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