Delta Electronics Inc (台達電子), the nation’s biggest power supply unit maker, aims to grow revenue this year beyond last year’s record-breaking figure via mergers and acquisitions and growth in core businesses, a company executive said yesterday.
Delta’s revenue climbed 7 percent to all-time high of NT$203.5 billion (US$6.18 billion) last year from NT$190.6 billion in 2014 after acquiring Norwegian power system provider Eltek ASA for about NT$17 billion. The deal marked the largest acquisition launched by Delta over the past decade.
To pursue long-term growth, Delta is adopting two growth strategies, chairman Yancey Hai (海英俊) told investors.
Aside from expanding core business, “M&A is our favorite approach... We are looking at buying market shares, clients or technologies for long-term growth,” he said.
Hai said Delta is now in talks with several multinational companies for acquisition deals as a successful bid for Eltek has boosted the company’s confidence in buying more companies abroad.
The Taiwanese firm now expects its newly acquired Eltek to improve its gross margin to a double-digit percentage this year and next year from last year’s 7 percent, he said.
Delta chief executive officer Cheng Ping (鄭平) also told investors that the company’s goal is to grow further.
Cheng said that the energy management, power supply unit component and industrial automation businesses will be the main growth areas for this year.
However, at the conference the company declined to respond to a foreign investor’s question as to whether Delta would achieve 10 percent growth in revenue this year.
Rather, Hai said that business visibility remains vague due to the uncertainty over the global economy for the time being, while the company is going through a major transformation from a power unit component supplier into a total solution provider, he added.
That means rising expenses and higher research and development spending for new products, he said.
Last quarter, Delta’s net profit rose 3 percent to NT$5.16 billion, or NT$2.11 per share, compared with NT$5.03 billion, or NT$2.06 billion per share, during the same period in 2014, according to the company’s financial statement.
Operating expenses jumped 28 percent to NT$9.89 billion last quarter from NT$7.75 billion in the prior year. The figure represented 17.8 percent of the company’s total revenue of NT$55.7 billion in the final quarter of last year.
Goldman Sach analyst Willy Chen said in a client note that Delta’s net profit was slightly better than his forecast, while operating expense profits missed his estimate by 8 percent due to record-high operating expenses.
Chen said Delta's sales for this quarter would likely fall by 15 percent from last quarter, but would resume its growth trajectory from next quarter.
"2016 organic growth and earnings before interest and tax (EBIT) could see 5 percent and 9 percent year-on-year growth due to growth from high margin products (passive components and industrial automation)," Chen said.
Chen maintained Goldman Sach’s “neutral” rating on Delta shares, which closed 1.06 percent lower at NT$140.5 on the Taiwan Stock Exchange yesterday.
The company’s board on Thursday approved the cash dividend distribution of NT$5 per common share, based on the company’s earnings per share of NT$7.67 last year.
That represents a payout ratio of 65 percent and 3.56 percent in dividend yield based on yesterday’s closing price.
This story has been updated since it was first published.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last