Smartphone camera lens supplier Largan Precision Co (大立光) yesterday said shipments would grow in the next two months, as clients are slated to launch new smartphones equipped with dual cameras.
“This month’s shipments will be better than last month’s and I expect clients to make more shipment requests next month,” Largan CEO Adam Lin (林恩平) told a media briefing after the company’s annual general meeting at its headquarters in Taichung.
Consolidated revenue last month rose 8 percent month-on-month, but dropped 24 percent year-on-year to NT$3.36 billion (US$104.27 million), according to company statistics.
Analysts attributed the monthly increase in revenue to increased handset shipments from clients other than Apple Inc and strong sales of some high-end models featuring dual cameras.
Largan’s sales performance this year has been lackluster due to weaker sales of Apple’s iPhone 6S. While many clients are adopting dual-camera modules for new handsets in the second half, Lin said he is not certain about Largan’s business outlook for the second half, citing unclear order visibility due to unpredictable consumer demand for new handsets.
In addition, maintaining a good yield rate for dual-camera products poses a challenge to Largan, due to demands from clients for higher quality, Lin said.
Commenting on Largan’s new factory in Taichung, Lin said the company recently restarted construction and expects the facility to be complete before the end of this year.
Construction was suspended in April after two workers fell to their deaths.
Largan is to install equipment and build clean rooms before the new factory becomes operational in the second quarter of next year, Lin said.
He said the government recently approved an increase of the new factory’s clean water supply to 1,500 tonnes per day, which has largely eased Largan’s concerns about a potential water shortage.
Citing Taiwan’s limited water resources, the Ministry of Economic Affairs previously denied Largan’s request to supply 1,500 tonnes of clean water, saying it would only grant half that amount to the firm and suggesting that it use recycled water.
Following continued negotiations with the ministry, Lin said the request for a daily water supply of 1,500 tonnes was approved recently, adding that camera lens production requires extremely clean water, otherwise it would scratch the products and cause defects.
Although the water supply issue has been resolved, Lin said he is worried about a potential nationwide electricity shortage.
Largan’s power generators can only support its operations for four hours and it does not have an alternative to meet its electricity demands, Lin said.
Largan shareholders yesterday approved a cash dividend of NT$63.5 per common share, based on the firm’s net income of NT$24.15 billion last year, or earnings per share of NT$180.08.
That translates into a payout of 35.26 percent, compared with 35.2 percent in 2014.
The dividend represents a yield of 2.11 percent, based on Largan’s closing price of NT$3,000 yesterday.
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