TPK Holding Co (宸鴻), a major supplier of touchpanels used in Apple Inc’s devices, is to continue to restructure its finances to improve profitability this year rather than seeking revenue growth, company chief executive officer Michael Chung (鍾依華) said yesterday.
Chung’s remarks came after the company reported a net loss of NT$20 billion (US$596.57 million) for last year, compared with NT$277 million in net profit recorded a year ago, mainly due to massive asset impairments and weak end-demand in the market.
The company took a drastic restructuring measure to book NT$18.97 billion in impaired assets from unprofitable and idled equipment in the third quarter of last year, Chung told an investors conference in Taipei.
The results translated into a loss per share of NT$57.86, reversing from NT$0.84 earnings per share a year ago, according to the company’s filing with the Taiwan Stock Exchange.
“We spent last year improving the company’s financial health and plan to continue streamlining operations,” Chung said.
TPK chief financial officer Freddie Liu (劉詩亮) said TPK’s Chinese clients generated 45 percent of the company’s revenue in the first half of last year, but dropped to less than 10 percent of TPK sales after the restructuring measures.
By the end of last year, TPK’s top five clients accounted for 86 percent of the firm’s total sales, he said.
“We plan to focus on well-known European, American and Japanese clients,” Liu said.
He said the company’s capital expenditure amounted to NT$3.8 billion last year, much lower than than the firm’s previous projection of NT$4.5 billion, as TPK turns more cautious about capital expenditure plans.
As a result, capital expenditure is to fall between NT$3 billion and NT$3.5 billion, this year, he said.
Despite lower capital spending, Chung said TPK continues to work with major clients to advanced touchpanel technology.
The market is to see new touch technology being used in new products at the end of next quarter, Chung said.
Liu said the company’s focus in the first half of this year is corporate restructuring, adding that this quarter’s sales are likely to decline by between 25 percent and 30 percent from last quarter’s NT$34.4 billion due to the slow season.
Revenue growth momentum is expected to pick up at the end of next quarter in line with clients’ planned product launches, he said.
TPK shares plunged 5.75 percent to close at NT$70.5 in Taipei trading yesterday, bucking the TAIEX’s 1.22 percent increase, Taiwan Stock Exchange data showed.
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