Wed, Aug 12, 2015 - Page 13 News List

Inventec predicts significant revenue growth due to notebook, mobile orders

By Lauly Li  /  Staff reporter

Electronics contract manufacturer Inventec Corp (英業達) yesterday said it expects revenue this quarter to grow significantly from last quarter, driven by growing orders for commercial notebooks, smart devices and servers.

The company made the remarks after reporting NT$930.69 million (US$29.01 million) in net income for last quarter, its lowest since the fourth quarter of 2012 due to expenses and exchange losses rose.

Last quarter's figure reflected a decline of 27.28 percent quarter-on-quarter and 37.95 percent year-on-year. Earnings per share were NT$0.32, the company said.

Inventec said it booked foreign exchange loss of NT$87 million last quarter, while operating expenses stood at NT$3.94 billion. As a result, gross margin fell to 5.6 percent last quarter from 5.9 percent in the first quarter.

But gross margin remained higher than the 5.3 percent reported in the second quarter last year, Inventec said.

Revenue in the first half totaled NT$179.99 billion, down by 19 percent from last year’s NT$221.58 billion.

“The worst is over. We expect sales to grow quarterly in the remainder of this year,” Inventec president Huang Kuo-chun (黃國鈞) told an investors’ conference in Taipei.

Huang said that while Microsoft Corp’s Windows 10 operating system needs time to spur notebook computer replacement demand, he thinks the PC industry is gradually climbing out from a trough.

“We are still optimistic about the PC industry in the long term,” he said, adding that both enterprises and consumers would eventually replace their old computers.

Commenting on Inventec’s notebook outlook for this quarter, Huang said shipment requests for the firm’s commercial models are strong, while orders for consumer product lines remain unclear at the moment.

However, revenue from the server segment this quarter is expected to grow by a single-digit percentage from last quarter, he said.

Chief financial officer Yu Chin-pao (游進寶) said Inventec expects its PC-related product shipments to increase by 10 percent from last quarter, fueled by clients’ new notebooks and tablets. Yu declined to provide figures for last quarter’s shipments.

Yu said Inventec would start to ship notebook computers for the educational market at the end of this quarter.

David Ho (何代水), CEO of Inventec’s handset subsidiary, Inventec Appliance Corp (英華達), said he expects smart device shipments this quarter to increase significantly from last quarter on the back of clients’ growing demand.

Inventec Appliance’s clients include Chinese smartphone maker Xiaomi Inc (小米).

“We sold nearly 30 million smart devices in the first half of this year, which was about 40 percent of our annual target of 70 million units this year. Given the strong orders from our clients, we expect to achieve our annual goal,” Ho said.

Apart from existing clients’ smartphone orders, Inventec has successfully entered the supply chains of new clients, Ho said.

Ho did not elaborate on the new clients, saying only that revenue contribution from them would be meaningful to Inventec next year.

In addition, he said it was possible for Inventec to start supplying smart devices other than smartphones to the company’s major smarphone clients.

Huang said construction of Inventec’s new plant in India has been delayed due to insufficient infrastructure.

However, the company has managed to start shipping a small amount of mobile devices from India for its major clients, he added.

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