Cheng Uei Precision Industry Co Ltd (正崴精密) chairman Gou Tai-chiang (郭台強) yesterday apologized to shareholders for the company’s weaker-than-expected earnings last year and promised better results this year as it works to improve operational efficiency.
“We will work harder to elevate our operating performance and keep investing in the research and development of new projects. I hope shareholders can give us time and continue to support us,” Kuo said at the annual shareholders’ meeting in New Taipei City’s Tucheng District (土城).
Cheng Uei, also known as Foxlink, is the nation’s leading provider of cable connectors and power management modules.
The firm reported a historically low net income of NT$792.76 million (US$26.33 million) last year, which plunged 51.95 percent from the previous year’s NT$1.65 billion.
Earnings per share were NT$1.55 last year, compared with NT$3.22 in the prior year, according to a company filing with the Taiwan Stock Exchange.
Gou attributed the decline to softer-than-expected sales of new products.
Rising labor costs in China also weighed on the company’s profitability, he added.
However, Cheng Uei has accelerated the development of its robotic arms and increased the installment of industrial automation at its Chinese plants in a bid to raise production efficiency and offset the rise in labor costs there, he said.
Gou said he believed the company’s operations would improve this year as it is better equipped to cope with fast-changing market dynamics, after an organizational restructuring.
“Last year was the worst year for Cheng Uei. We expect revenue to rebound this year,” he said.
Cumulative revenue in the first four months of the year dropped 2.38 percent annually to NT$24.1 billion, company data showed.
However, revenue in the second half of this year is forecast to increase by 50 percent from the first half, driven by the growth momentum of components used in smartphones, earphones and game consoles, Gou said.
Cheng Uei is also stepping up efforts to invest in its new businesses, including healthcare, electric vehicles and “green” energy, to cultivate new growth catalysts for long-term development, he said.
Shareholders yesterday gave the green light to Cheng Uei’s cash distribution proposal of NT$1.5 per share based on last year’s earnings of NT$1.55 per share.
That translates into a payout ratio of 96.77 percent, much higher than last year’s 62.1 percent, and a yield of 3.48 percent, based on the company’s closing price of NT$43.10 in Taipei trading yesterday.
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