TV demand drags Innolux earnings down 75 percent - Taipei Times
Tue, May 08, 2018 - Page 12 News List

TV demand drags Innolux earnings down 75 percent

By Lisa Wang  /  Staff reporter

Innolux Corp (群創), an LCD panel manufacturing arm of Hon Hai Precision Industry Co (鴻海精密), yesterday reported NT$2.95 billion (US$99.1 million) in net profit for last quarter, down 75 percent annually, as sagging demand for large televisions from China dragged down panel prices.

The Miaoli-based company made NT$11.86 billion in the first quarter of last year, while earnings per share plunged to NT$0.3 from NT$1.19 during the same period last year, a company statement said.

Innolux blamed the weak quarterly earnings on a persistent downturn in panel prices and an unfavorable foreign-exchange rate.

Average selling prices last quarter plunged 15.29 percent to US$338 per square meter for a fourth consecutive quarter, compared with US$399 in the first quarter last year, Innolux said.

As customers reduced orders to digest excessive stockpiles, Innolux saw contribution from TV panels fall to 41 percent of last quarter’s revenue of NT$66.8 billion from 53 percent a year ago, the statement showed.

However, the company delivered a higher earnings before interest, taxes, depreciation and amortization margin of 19.5 percent, beating local rival AU Optronics Corp’s (友達光電) 16 percent and South Korean rival LG Display Co’s 14 percent.

Innolux said it expects last quarter’s weakness to extend into the current quarter due to seasonal factors.

SHIPMENT OUTLOOK

Large panel shipments are to drop about 5 percent quarter-on-quarter, while the average selling price is to continue to dip by a high single-digit percentage, despite customers’ inventory corrections after excessive stockpiling during the January-to-March period, the company said.

The company expects demand for small and medium-sized flat panels to dip during the current quarter, despite increasing penetration of 18:9 full-screen panels for mobile phones.

Small and medium-sized panel shipments are to drop by a low-single-digit percentage this quarter, before a pickup next quarter, while average selling prices are to increase by a low single-digit percentage, Innolux said.

HIGH DIVIDEND

Separately, Innolux said its board of directors yesterday approved the distribution of a cash dividend of NT$0.8 per common share, the highest level since a three-way merger in 2010.

That represents a payout ratio of 21.5 percent, as Innolux reported earnings per share of NT$3.72 for last year.

The board also approved the issuance of 950 million new common shares to repay debt and replenish its operations, among other uses.

Innolux has budgeted NT$55 billion for new facilities and manufacturing equipment for this year, more than double last year’s NT$25.02 billion.

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