Asustek Computer Inc (華碩) yesterday said the profitability and shipments of its PC and smartphone businesses are expected to improve this year, after reporting a nearly 20 percent year-on-year decline in net income last year.
“We stabilized our operation in the second half of last year... Our top priority is to maintain profitability and then to seek shipment growth across the board this year,” Asustek chief executive Jerry Shen (沈振來) told an investors’ conference at the company’s headquarters in Taipei.
Shen’s remarks came after Asustek reported net profit of NT$15.54 billion (US$528.45 million) last year, its lowest annual profit since 2010, a company filing with the Taiwan Stock Exchange showed.
Earnings per share were NT$20.9, compared with NT$25.9 in 2016.
Gross margin contracted by 0.3 percentage points year-on-year to 13.3 percent last year, while operating margin fell 0.9 percentage points to 3.2 percent.
Asustek chief financial officer Nick Wu (吳長榮) said that although the company’s operations faced “turbulence” last year, the board plans to keep the dividend at NT$15 per share, which would translate into a payout ratio of 71.77 percent based on last year’s earnings.
Looking ahead, Shen said Asustek is scheduled to unveil three new ZenFone series models at the Mobile Congress World trade show in Barcelona, Spain, at the end of this month.
Two of the three models are to begin shipping next month, while the other would hit international markets in June, Shen said, adding that there would be a total of six new ZenFone models this year.
“We have accelerated new product development to ensure that we have new smartphones ready to hit the market each quarter, a strategy that should maintain sales momentum,” Shen said.
Shen said he expects shipments at the smartphone business to pick up from April and continue through the rest of the year, exceeding the breakeven point of 12 million units this year.
Asustek’s PC business, which accounted for 63 percent of its total revenue of NT$392.89 billion last year, is forecast to grow its shipments by 5 percent this year as the company targets higher-priced, thin, light and convertible notebooks, Shen said.
Shen said he is upbeat that revenue at the gaming business would climb by double-digit percentage points this year, as the company is dedicated to building gaming communities and supporting competitions.
For this quarter, revenue from PCs, mobile devices and components is expected to contract by between 7.5 percent and 12.5 percent from last quarter due to the low season, Wu said.
Asustek shares fell 0.91 percent to close at NT$271.5 in Taipei trading yesterday, outperforming the benchmark TAIEX, which fell 1.49 percent.
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