FIH Mobile Ltd (富智康) yesterday issued a profit warning for the first half of the year in a statement filed with Hong Kong Exchanges and Clearing Ltd.
The Hon Hai Precision Industry Co (鴻海精密) subsidiary said it expected to post a net loss of less than US$110 million for the six-month period ending in June, as the acquisition of Nokia’s feature phone business weighed on its bottom line.
Joining forces with Finland-based HMD Global, the company in December last year completed a deal to acquire Nokia’s assets from Microsoft Corp for US$350 million.
The acquisition price was only a small fraction of the US$7.2 billion Microsoft paid for them in 2014.
SETBACK
The expected loss for FIH, in which Hon Hai owns about a 70 percent stake, represented a significant retreat from a net profit of US$20.82 million in the same period last year, FIH said.
In the statement, the company attributed the expected lackluster first-half performance to “costs relating to a new business group within the company under a collaboration agreement announced on May 18 last year,” referring to the deal to buy the Nokia assets.
FIH said it expected to continue to book the costs related to the acquisition in the second half.
Despite the profit warning, FIH said its consolidated revenue for the first half of the year could surpass US$4.6 billion, up more than 99 percent from a year earlier.
An aggressive investor in India, FIH made the deal with Microsoft last year partly to support parent Hon Hai’s interest in building its presence in the fast-growing Indian mobile phone market.
Under the deal, FIH acquired Nokia’s assets, which involve the technology, manufacturing, design and marketing of cellphones and other handheld devices under the Nokia name, as well as some of Nokia’s intellectual property.
HON HAI
Because Hon Hai owns a majority stake in FIH, its profitability is likely to also suffer this year, analysts said.
Hon Hai last year posted a net profit of NT$148.66 billion (US$4.9 billion), up 1.22 percent from a year earlier, or earnings per share of NT$8.60, compared with NT$8.54 in 2015.
The figure was the highest in Hon Hai’s history, boosted largely by the launch of the latest iPhones by Apple Inc in September last year.
The new iPhones — the 5.5-inch iPhone 7 Plus and the 4.7-inch iPhone 7 — helped Hon Hai command a higher profit margin.
Its bottom line also benefited from foreign-exchange gains due to a weaker New Taiwan dollar in the fourth quarter, analysts said.
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
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
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