Fri, Aug 14, 2015 - Page 13 News List

Sercomm posts record net profit

By Lisa Wang  /  Staff reporter

Telecoms equipment maker Sercomm Corp (中磊) yesterday posted record net profit for last quarter, mainly supported by strong demand for long-term-evolution (LTE) technology migration and broadband demand from China and North America.

The company expects the growth momentum to continue throughout this year, aiming to achieve its annual revenue target of US$1 billion, one year ahead of its original schedule next year.

In the first half of this year, the company posted a revenue of NT$14.91 billion (US$461 million), with shipments at an all-time high of 13 million units in the period.

“Business in the third quarter will be a better period than the second quarter. Overall, the second half will be better than the first,” company chief executive James Wang (王煒) told an investors’ conference yesterday. “Home gateway will be one of the main drivers.”

Home gateway, which allows the connection of a local area network to a wide area network, such as a computer network, or the Internet, was the biggest revenue source for Sercomm last quarter, accounting for 64 percent.

“Most sectors in China are softening due to the weak macro economy, but demand for LTE and fiber network equipment remain strong,” Wang said.

Revenue contribution from China is to account for about 25 percent of the total this year, a spike from less than 10 percent in 2013, Wang said.

The company expects to secure a contract to supply its small cell base stations to Chinese telecoms operators, he said.

“Demand for fiber network equipment also looks sustainable in the US, while Sercomm is gaining shares in Europe’s copper wire market,” Wang said.

In the second quarter, net income almost doubled to NT$328 million, compared with NT$167 million in the first quarter, while rising 20.6 percent from NT$272 million a year earlier.

Gross margin fell to 13.2 percent last quarter from 16.4 percent the previous quarter as the company shipped more lower-margin copper wire items.

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