Taiflex Scientific Co (台虹科技), which manufactures flexible printed circuit boards (PCBs) and solar backsheets, on Tuesday reported that net income last quarter dropped to the lowest level in 25 quarters, but its board has still decided to reward shareholders with the largest cash dividend in three years.
Net income in the first quarter of this year fell 2.4 percent year-on-year and 39.76 percent quarter-on-quarter to NT$96.94 million (US$3.3 million), with earnings per share falling to NT$0.46, the company said in a filing with the Taiwan Stock Exchange.
Gross margin declined 0.32 percentage points annually, but improved 1.01 percentage points quarterly to 19.71 percent, the filing showed.
While Taiflex posted a 19.83 percent increase in sales of electronic materials — including its main product, flexible copper-clad laminate — in the first quarter from a year earlier, consolidated revenue fell 13.54 percent annually to NT$2 billion, which it attributed to a 57.03 percent plunge in sales in its solar business from a year earlier after a fire at its plant in Kunshan, China, on Jan. 25.
Copper-clad laminates are the most popular substrate material for PCBs, essential parts that route electrical signals between electronics.
Near-term revenue and profitability for PCB makers are likely to be negatively affected by slowing smartphone demand, unfavorable foreign exchange rates and rising raw material costs, but positive factors, such as upgrades to PCB specifications and sound supply-demand dynamics for rigid-flex PCBs, remain intact in the long term, analysts said.
Taiflex is scheduled to hold an investors’ conference on May 2 to elaborate its financial results for last quarter, as well as shed light on its sales forecast, factory utilization and business plans for this quarter and the second half of this year.
Despite last quarter’s weaker-than-expected performance, the company’s board on Tuesday decided to distribute a cash dividend of NT$2.5 per common share, based on last year’s earnings per share of NT$3.55, translating to a payout ration of 70.42 percent.
The dividend, if approved by shareholders at the company’s annual general meeting in Kaohsiung on May 29, would be a significant increase from NT$2 in 2016 and NT$2.2 in 2015.
Separately, Iteq Corp (聯茂), which manufactures copper-clad laminates for PCBs, this week reported that first-quarter sales grew 11.17 percent annually to NT$5.69 billion, thanks to rising copper foil prices and more shipments of its halogen-free low-loss products — low dielectric-constant and dissipation-factor materials — for PCBs.
Iteq, which has operations in Hsinchu County’s Sinpu Township (新埔) and Taoyuan’s Pingjhen District (平鎮), as well as China’s Wuxi and Guangzhou, is constructing a new plant in China’s Jiangxi Province to meet rising copper foil substrate demand from Chinese handset vendors.
The plant is scheduled to start mass production next year, local Chinese-language media reported.
Iteq’s board has proposed a cash dividend of NT$3.1, based on last year’s earnings per share of NT$4.11, which would be larger than the payouts of NT$2.5 and NT$1.6 in the previous two years.
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