Flexium Interconnect Inc (台郡), a major supplier of flexible printed circuit boards (FPCBs) to Apple Inc products, yesterday said that profitability last quarter deteriorated due to a seasonal slowdown, foreign-exchange losses and higher research expenditure.
Gross margin slid from 19.9 percent in the final quarter of last year to 14.7 percent last quarter, the lowest in four years, while its operating margin dropped from 15.3 to 6.1 percent during the same period, the Kaohsiung-based company said.
On an annual basis, gross margin declined from 23 percent and operating margin fell from 15.3 percent, the company said.
Net income for the January-to-March period fell 82.1 percent quarter-on-quarter, but rose 0.4 percent year-on-year to NT$246 million (US$8.28 million).
Earnings per share were NT$0.8, down from NT$4.46 the previous quarter and NT$0.87 a year earlier.
Despite the first-quarter setback, the company is optimistic about future developments as it continues investing in new products and technologies, chief financial officer Arthur Hsiung (熊雅士) told an investors’ conference in Taipei.
As most of its clients are going through product transitions in the second quarter, Hsiung said the company’s production and inventory for this quarter would be 15 to 25 percent higher than the same period last year.
Flexium earlier this year said that it plans to spend NT$9.4 billion in capital expenditure this year and next year to produce more high-end products and extend its lead in the FPCB industry.
The company’s new plants in Kaohsiung and Kunshan, China, are under construction, and are expected to start mass production next year, Hsiung said.
Flexium has started commercial production of next-generation 25-micron fine line products, while the development of new 5G-related materials and new process technologies are proceeding as scheduled.
These developments should gradually drive up the company’s profitability this year and support its growth over the next three years, he added.
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