Sat, Mar 03, 2018 - Page 12 News List

Advantech sees profit lift 8.47% on US recovery

By Lisa Wang  /  Staff reporter

Advantech Co (研華), the world’s largest industrial computer supplier, yesterday posted an annual rise in net profit of 8.47 percent to NT$6.15 billion (US$210 million) for last year, matching its lowered financial forecast amid downward pressure from a strong local currency and higher material costs.

That was compared with a net profit of NT$5.67 billion in 2016. Earnings per share rose to NT$8.96 last year from NT$8.84 in 2016.

“Overall, the company’s performance in 2017 was mostly in line with our expectations,” Advantech chief executive officer Eric Chen (陳清熙) said in a statement.

“However, systemic risks such as an appreciation of the New Taiwan dollar and price hikes for components put pressure on the company’s revenue and profitability,” he said.

Gross margin shrank to 39.2 percent last year, compared with 40.76 percent in 2016, the statement showed.

That was the first time Advantech saw its gross margin fall below 40 percent since 2012.

Due to currency volatility, the company in November last year halved its revenue growth forecast for the year from 10 percent to 5 percent.

Revenue increased 5.65 percent to NT$44.38 billion last year, from NT$42 billion in 2016, the company said.

In US dollar terms, Advantech said it reached its original target of growing revenue by a double-digit percentage of 12 percent to US$1.46 billion last year, from US$13 billion in 2016.

The strongest growth came from the embedded board module business segment, which saw 17 percent annual growth, and the industrial Internet-of-Things (IoT) segment, with 15 percent annual growth, the statement said.

Europe and emerging markets saw the highest growth, at 24 percent and 29 percent year-on-year, respectively, while the China and US markets grew 9 percent and 6 percent each, it said.

“In the first half of 2018, on the demand side, we expect to see continued stable growth momentum in Europe and China, while we expect revenues from the US market to continue recovering, following an improvement in the second half of 2017,” it said.

Advantech said it has seen growing demand for its products used in telecom equipment in the US and strong interest in 3G communications equipment in emerging markets.

The company in November last year said it aimed to achieve 10 percent revenue growth this year on the back of robust demand for industrial IoT applications and other products.

The company is scheduled to release detailed financial figures and update its business outlook during an investors’ conference on Wednesday next week.

Meanwhile, the company’s board yesterday approved a plan to distribute a cash dividend of NT$6.6 per common share, subject to shareholder approval, it said in a separate statement filed with the Taiwan Stock Exchange.

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