Fri, Apr 14, 2017 - Page 12 News List

Rising yields lift Largan’s profitability

EXPANSION:The camera lens manufacturer is counting on a new plant that will start running later this year to boost production, but employee recruitment is critical, it said

By Lauly Li  /  Staff reporter

Largan Precision Co (大立光), the world’s leading camera lens supplier for handsets, yesterday reported a record-high gross margin of 70.94 percent for the first quarter, driven by continued yields improvement, which helped offset the impact of a slow season and a stronger currency.

The figure outpaced last quarter’s peak season margin of 70.66 percent and was 11.7 percentage points higher from the same period a year earlier.

“The New Taiwan dollar’s appreciation and our product mix were negative factors, but better yields helped the company sustain its gross margin,” special assistant Josephine Huang (黃印嘉) told a teleconference.

Net income last quarter came in at NT$4.88 billion (US$160.94 million), up 36 percent from NT$3.62 billion a year earlier, but down 42 percent from the previous quarter’s NT$9.93 billion, company data showed.

That translates into earnings per share of NT$36.41 for the January-to-March period, compared with NT$27.01 a year ago and NT$63.06 the previous quarter.

Huang said Largan booked non-operating losses of NT$964.34 million last quarter, mainly due to foreign-exchange losses of NT$1.14 billion.

Largan chief executive officer Adam Lin (林恩平) said that revenue for this month might be slightly down or flat from last month’s NT$3.62 billion, and then pick up next month.

“The order outlook is turning out better than I expected due to some unexpected orders,” Lin said.

First-quarter revenue surged 30.66 percent year-on-year to NT$10.8 billion, the company said in a Taiwan Stock Exchange filing earlier this month.

Asked if Largan stands a chance of receiving orders from Samsung Electronics Co this year, after the two companies settled a three-year-long patent dispute in November last year, Lin said there is no progress on a potential collaboration with Samsung at the moment.

Lin said that protecting the company’s patent rights is one way of creating a technological barrier for rivals in the field, but the company would not rule out licensing its patents if the returns are attractive.

A new plant in Taichung, expected to become operational by the end of next quarter, should help expand the company’s production capacity during the peak season and help capture more dual-cam business for Android phones, he said.

Whether the company would be able to recruit enough employees and train them before the peak season starts would be a key factor in determining its new capacity’s yields, Lin said.

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