Casetek Holding Ltd (鎧勝), which supplies casings for Apple Inc’s iPads and MacBooks, yesterday reported the lowest-ever profit in its history after a major client delayed the launch of a new line of notebook computers and the approach of the slow season for tablets meant fewer orders.
Net income was NT$434 million (US$13.69 million) for the April-to-June quarter, falling 54.7 percent from NT$959 million a year earlier and 52.9 percent from the prior quarter’s NT$922 million, the company said.
Last quarter’s revenue also hit a record low of NT$6.54 billion, down 20.3 percent from NT$8.2 billion a year earlier and 22.3 percent from the previous quarter’s NT$8.42 billion.
Due to the falling revenue scale and a low production utilization rate, gross margin retreated to its weakest level of 16.6 percent last quarter, falling by 3.5 percentage points from 20.1 percent a year earlier and 8.6 percentage points from 25.2 percent in the previous quarter, Casetek chief financial officer Jonathan Chang (張昭平) said.
“The weak sales of tablets due to seasonal factors affected gross margin by 4 percentage points last quarter from the previous quarter, while the delay of a major client’s launch of new notebooks cut it by another 4 percentage points,” Chang told a teleconference.
Operating margin was 6.1 percent last quarter, contracting by 4.9 percentage points from 11 percent a year earlier and 8.9 percentage points from the previous quarter’s 15 percent, Casetek said.
The company’s second-quarter results were lower than HSBC Securities Corp Ltd’s estimates of NT$701 million net income, 23.2 percent gross margin and 12.9 percent operating margin.
Although Casetek did not disclose the name of the major client, it is widely believed to be Apple.
Casetek chief executive officer Gary Chuang (莊育志) said business would pick up significantly in the second half of this year, after hitting the bottom in the second quarter.
He said Casetek’s production has recently started running at full utilization and the momentum might extend throughout the rest of the year.
With the major client’s planned launch of new notebooks this quarter, Casetek’s revenue contribution from notebook products in the second half might grow from about 40 percent last quarter, Chuang said.
The tablet business, which accounted for between 50 and 60 percent of last quarter’s revenue, is expected to enter the traditional peak season in the second half of this year, he said.
However, whether the company’s revenue in the second half could grow from the same period last year will be determined by the actual shipment volume and the average selling prices of casings, he added.
Regarding Casetek’s business for smartphones, Chuang said thefirm has not yet entered the supply chain of its major client, but has been approaching domestic smartphone vendors.
Despite the company’s attempts to diversify its products, Casetek will not supply smartphone casings this year, he said.
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