E Ink Holdings Co (元太科技), which holds a dominant position in the world’s electronic paper display market, yesterday posted its first operating loss in about eight quarters as e-reader sales slowed due to product transition and operating expenses rose.
The results were largely in line with the company’s expectations, as e-reader clients revamp their models and shift to screen sizes larger than 6 inches.
However, E Ink expects growth momentum to pick up later this quarter from last quarter’s NT$2.99 billion (US$99.69 million), bringing it back on track with its full-year revenue forecast.
Nearly 70 percent of the company’s total revenue last year came from e-paper displays used in e-readers.
“Revenue in the second quarter will be better than the first quarter,” said Patrick Chang (張元培), a financial director at E Ink. “We still believe that revenue for the full year will grow from last year’s level.”
E Ink posted an operating loss of NT$263.89 million for the quarter ending March 31, compared with an operating profit of NT$45 million in the same period last year, according to the company’s financial statement.
Operating expenses climbed 14.3 percent year-on-year to NT$1.37 billion last quarter from NT$1.2 billion.
They included a 26 million euro (US$30.54 million) equity investment in SES-imagotag as E Ink aims to accelerate electronic shelf label (ESL) growth.
“We are seeing high-speed growth in the ESL market as South America is joining Europe, China and the US adopting the solution,” E Ink president Johnson Lee (李政昊) told an investor teleconference yesterday.
“We cannot satisfy the strong growth just with our own module capacities. We want to create an ecosystem to address that growth together with our partners,” Lee said.
SES-imagotag is the world’s No. 1 player in the e-tag market, Lee said.
The investment should help E Ink develop electronic shelf labels that better cater to market demand, he added.
Aside from e-readers and ESL, eNote is gradually becoming its third revenue driver, he said.
E Ink’s flexible e-paper displays are used in electronic notebooks for students, hospitals and government agencies.
The company is expanding its reach to equip flexible e-paper displays for new areas such as car license plates.
Last quarter, E Ink eked out a net profit of NT$49 million, aided by an 8.52 percent annual increase in royalty income to NT$446 million and less the financial burden from its bankrupt South Korean subsidiary Hydis Technologies Co.
Last quarter’s figure represented a decline of 64.2 percent from a net profit of NT$137 million the previous year.
On a quarterly basis, net profit sank 89.2 percent from NT$456 million.
Gross margin fell to 38.3 percent last quarter, compared with 38.7 percent a year earlier and 42.1 percent a quarter earlier.
E Ink attributed the contraction to higher shipments of lower-margin flexible e-paper displays and increased key components costs, such as multilayer ceramic capacitors.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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