Tue, May 16, 2017 - Page 12 News List

Exchange rates drag on Inventec profits

BITE-SIZED:Reports that Inventec are to assemble Apple Inc’s planned ‘smart’ home device — an AI voice-controlled assistant — have been dismissed as ‘market speculation’

By Lauly Li  /  Staff reporter

Inventec Corp (英業達) yesterday reported that net income last quarter fell to its lowest level since the fourth quarter of 2012, dragged down by foreign exchange losses of NT$1.2 billion (US$39.79 million).

Net profit plummeted 44.87 percent to NT$678 million, from NT$1.23 billion a year earlier, and was 61.69 percent lower than the prior quarter’s NT$1.77 billion, Inventec data showed.

“The New Taiwan dollar sharply appreciated 6 percent in the first quarter, which put immense pressure on Inventec’s profitability,” chief financial officer Yu Chin-pao (游進寶) told an investors’ conference at the firm’s headquarters in Taipei.

Inventec’s loss-making solar power business continued to erode earnings generated from the company’s information and communications technology segment, Yu said.

The firm’s gross margin fell 0.3 percentage points annually to 5.6 percent last quarter, and its operating margin dropped 0.4 percentage points to 1.6 percent due to appreciation of the NT dollar and the solar power business’ lackluster performance, Yu said.

“Inventec expects the effects of appreciation to decrease this quarter,” he said. “Inventec estimates revenue this quarter will climb by a single-digit percentage from last quarter’s NT$99.75 billion, supported by growing orders for servers, handheld devices and the steady demand for commercial PCs.”

“Servers and handheld devices are the main growth engines for Inventec this year, based on an order forecast offered by our clients,” Yu added.

Inventec president Huang Kuo-chun (黃國鈞) said the company’s server business this year is likely to be driven mainly by rising global demand for data centers.

“The cloud-computing demand for artificial intelligence [AI] voice recognition applications is also expected to support the momentum, thanks to the increasing population of AI home products, such as Amazon.com Inc’s Echo,” Huang said.

“Revenue and profit in Inventec’s handheld devices segment are likely to increase by a double-digit percentage this year from last year, based on clients’ new projects,” Inventec’s handheld devices subsidiary Inventec Appliance Corp (英華達) chief executive officer David Ho (何代水) said.

The subsidiary manufactures a wide range of “smart” devices, such smartphones, wireless speakers, wearable devices and wireless earphones. Its clients include China’s Xiaomi Corp (小米), US’s Fitbit Inc and Apple Inc.

Inventec, which assembles Apple’s AirPods, has been rumored as having secured an order to make the US company’s planned AI voice-controlled home assistant, similar to the Amazon Echo, in the second half of this year.

However, Ho declined to confirm the market speculation.

Inventec has two US clients that are to introduce voice-controlled home products this year, expecting shipments to reach peak levels in the third and fourth quarter this year, he said.

Total shipments of Inventec’s handheld devices, including AI home products and earphones, are estimated to surge by more than 10 percent annually to 700 million units this year, Ho said.

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