Wed, Oct 28, 2015 - Page 13 News List

AUO decreases utilization

By Lisa Wang  /  Staff reporter

AU Optronics Corp (AUO, 友達光電), the nation’s No. 2 LCD panel maker, yesterday said it would further decrease factory utilization rate to brace for a continuation of slump in demand this quarter after posting its weakest quarterly net profit in six quarters on a staggering global economy.

This quarter would be a tougher period due to the double hit of slow seasonal demand and the wavering global economy, especially the Chinese economy, AUO chairman and chief executive officer Paul Peng (彭雙浪) told investors.

“We have safely sailed through the [industry’s] autumn in the third quarter. Now we are preparing for the winter to come,” Peng said.

The double blow “might cause some companies to struggle” this quarter, Peng added.

To deal with industry headwinds, AUO is to arrange an early annual equipment maintenance, step up new product development efforts and adjust downward equipment loading rates in accordance with market volatility, he said.

The firm’s equipment loading rate stood at 91 percent last quarter, AUO said.

AUO has cut equipment usage at less-advanced factories in response to sluggish demand for PC panels in the third quarter, it said.

To better manage its inventory, AUO said it plans to spend less than NT$40 billion (US$1.22 billion) on capital spending this year.

Due to bleak industry prospects, the firm trimmed its forecast of global flat-panel shipment growth from an earlier estimate of between 4 percent and 6 percent to between 3 percent and 4 percent annually.

During the quarter that ended Sept. 30, net profit sank 23 percent to NT$3.46 billion, compared with NT$4.5 billion in the previous quarter, according an AUO financial statement.

Operating margin dipped to 3.8 percent last quarter from 6.9 percent in the prior quarter, it said.

AUO said economic weakness has curtailed demand as reflected in a 10 percent annual decline in TV sales during China’s National Holiday sales early this month.

AUO expects shipments of TV and PC panels to decline by a high-single-digit to low-teens percentage in the current quarter, while it tipped prices for TV and PC panels to slide by a low single-digit percentage this quarter from US$442 per square meter last quarter.

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