Telecom equipment supplier Sercomm Corp (中磊) yesterday posted a 37 percent annual growth in net profit for last year, supported by rapidly growing demand for fiber-optic broadband equipment mostly from China and North America.
Net profit surged to a record high NT$1.31 billion (US$40.15 million) last year, compared with NT$949 million in 2014, according to the company’s financial statement. That translated into earnings per share of NT$5.57 last year, up from NT$4.21 the previous year.
The growth momentum is expected to extend into this year, Sercomm told investors.
“It is the management team’s target to grow top-line [revenue] and bottom-line [net profit] at an equal rate this year,” company president James Wang (王煒) said.
Wang said the growth this year would come from higher-margin products such as integrated access devices, or customized gateway computers, mostly for European telecom operators and new products for Internet of Things-related services such as “smart” home surveillance and energy control devices.
Sercomm’s consolidated revenue last year surged by 51 percent to NT$3.5 billion, outpacing the growth of its net profit. Home gateways, which facilitate connection between a local area network and a wide area network, are the biggest revenue source for Sercomm, accounting for more than a 65 percent share, the statement showed.
Gross margin last year dropped to 14.2 percent from 15.8 percent in 2014, the finical statement showed.
This year, Sercomm revenue is expected to grow by between 10 and 15 percent annually, analysts who attended the company’s investors’ conference said yesterday. They requested not to be named as they are not authorized to speak to the media.
Three years ago, Sercomm set a target to grow into a “billion [US] dollar company” by next year in terms of revenue. As the company made US$1 billion in revenue last year ahead of schedule, the firm is on its way to reach its second goal of making US$1 billion net profit next year, Sercomm chairman Paul Wang (王伯元) said yesterday.
The company yesterday said the board has approved to distribute a cash dividend of NT$4 per share, representing about a 72 percent payout ratio. The distribution also meant a dividend yield of 4.85 percent, based on the company’s share price of NT$82.4 yesterday.
Sercomm, which designs and manufactures broadband networking devices, shipped 28 million units of broadband equipment last year, up 47 percent from 19 million units shipped in 2014.
The company supplies 4G small-cell base stations to telecom operators, including Chunghwa Telecom Co (中華電信), Far EasTone Telecommunications Co (遠傳電信) and China Mobile Ltd (中國移動).
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