Mon, Feb 12, 2018 - Page 16 News List

Innolux to more than double capex budget

CALCULATIONS:After reporting its highest profit in a decade, the company’s budget has increased dramatically, but includes the facility it bought from Hon Hai last year

Staff writer

Flat-panel maker Innolux Corp (群創光電) on Friday announced that it plans to raise its capital expenditure (capex) from about NT$25.02 billion (US$851 million) last year to NT$55 billion this year after posting its highest profit in 10 years last year.

The increase in capex includes the NT$31.4 billion that Innolux is to spend on a sixth-generation low-temperature polysilicon (LTPS) panel facility, which the company bought from its parent Hon Hai Precision Industry Co (鴻海精密) in November last year.

The LTPS facility in Kaohsiung’s Lujhu District (路竹) is dedicated to the production of flat panels for Hon Hai, contributing about 5 to 6 percent of the company’s revenue last year, Innolux chairman Wang Jyh-chao (王志超) told a teleconference with investors.

The company expects this year’s depreciation and amortization to be between NT$35 billion and NT$36 billion, compared with NT$33.56 billion last year.

Innolux reported net income of NT$37.03 billion for last year, a dramatic surge from NT$1.84 billion a year earlier.

Earnings per share (EPS) were NT$3.72 last year, higher than the previous year’s NT$0.19 and its best performance since 2007, when they were NT$6.51.

Gross margin improved from 9.1 to 20.9 percent and operating margin surged from 2.2 to 14.3 percent.

Revenue grew 14.7 percent from NT$287.09 billion to NT$329.17 billion, the company said in a financial statement.

The Miaoli County-based company said its total flat panel shipments last year increased 5.4 percent to 28.47 million square meters from a year earlier in terms of surface area.

The company shipped 116.19 million large flat panels last year, up 5 percent from 110.69 million units in 2016, and 270.78 million small and medium-sized flat panels, up 20.4 percent from 224.88 million units shipped a year earlier.

For this quarter, Innolux said both shipments and average selling prices (ASP) would be lower than last quarter due to seasonal effects and clients’ inventory adjustments.

The company forecast that its shipments of large-sized panels would drop between 7 and 9 percent, and that of small and medium-sized panels would drop up to 20 percent, with a decrease of about 5 percent for ASPs.

The company’s business performance for last month showed signs of this weakness, as revenue declined 4.2 percent year-on-year and 3.5 percent month-on-month to NT$26.1 billion.

Innolux president Robert Shiao (蕭志弘) said the demand momentum appears solid this year, but the dynamics of supply would be a key factor in determining how much growth the market is going to see.

For the moment, the company expects new supply to increase between 8 and 10 percent this year, while demand is to grow about 5 to 8 percent, Shiao said.

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