Mon, Mar 23, 2015 - Page 13 News List

Hon Hai’s FIH surges on wider customer portfolio

Staff writer, with CNA

Hon Hai Precision Industry Co’s (鴻海精密) subsidiary FIH Mobile Ltd (富智康) posted a jump in net profit last year on the back of efforts to broaden its customer portfolio.

In a statement posted on the Hong Kong Exchanges and Clearing Ltd, the company, in which Hon Hai holds about a 70 percent stake, said that it saw US$169 million in net profit last year, an increase of 118 percent from a year earlier.

FIH — which produces a variety of electronic products for international brands — recorded US$0.0224 in earnings per share, up from US$0.0104 a year earlier.

Last year, FIH posted US$6.83 billion in sales, up 36.7 percent from a year earlier. The company said that customers in Asia accounted for 62.38 percent of its total revenue, buyers from the Americas represented 25.82 percent, and clients from Europe made up 11.8 percent.

“The profit increase was mainly driven by gross margin expansion, principally as a result of increased orders from customers, yield and operation efficiency, effective cost controls and resource optimization,” FIH said in the statement.

“In the past two to three years, the group had succeeded in both customer penetration and new client expansion, which has diversified the customer mix through strengthening existing relationships and building up new relationships, thereby giving rise to more orders from customers and ultimately, earnings,” the statement said.

The Hong Kong-listed company said that with more and more customers adopting metal casings, its gross margin has been on the rise.

FIH said that since demand for Chinese-brand electronics devices has picked up, the company’s sales in the Asian market have risen significantly, serving as the driver to last year’s revenue and profit growth.

FIH said that, it has proposed issuing a NT$0.00544 cash dividend for last year for each common share and US$0.01926 for each preferred share.

Market analysts said that the significant growth in net profit enjoyed by FIH is expected to boost parent company Hon Hai’s earnings for this year. Hon Hai has not reported its yearly results for last year yet.

On Friday, Hon Hai shares increase by 2.09 percent to close at NT$93 on the Taiwan Stock Exchange.

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