Wed, Aug 15, 2018 - Page 12 News List

Innolux sees first quarterly loss in years as prices drop

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 its first quarterly loss in about two years for last quarter, as selling prices slumped due to sagging demand for TV panels and a supply glut.

The Miaoli County-based company said in a statement that it expects demand to recover this quarter as TV brand customers are gearing up promotional campaigns ahead of the industry’s peak season in the second half of the year.

Additionally, customers have reduced their inventories to healthy levels, it said.

Innolux said it “feels” strong growth momentum from clients.

The company projected that rebounding demand would lift the average selling prices of its small and medium-sized panels, as well as its large panels.

It forecast that the average selling prices for TV and computer panels would bounce back by a low-single-digit percentage this quarter from last quarter.

Innolux in June saw an uptick in prices of major TV panels, saying at the time that rising demand for 40-inch, 50-inch, 58-inch and 65-inch TV panels would help stabilize its operations.

It forecast that shipments of TV and computer panels would grow by a low-single-digit percentage quarter-on-quarter, while shipments of smaller panels for smartphones and tablets would fall by a low-single-digit percentage.

The world’s major TV vendors are expected to increase purchases of TV panels by between 10 percent and 15 percent quarterly in the third quarter, market researcher TrendForce Corp (集邦科技) said.

Last quarter, TV vendors scaled back TV panel purchases by 4 percent quarter-on-quarter, the research house said.

In the April-to-June period, Innolux swung into a quarterly loss of NT$1.93 billion (US$62.65 million), compared with net profits of NT$2.94 billion in the first quarter and NT$12.12 billion in the second quarter of last year, company data showed.

The company attributed last quarter’s losses to an additional tax payment of NT$2.7 billion on retained earnings.

Operating profit shrank 83 percent from NT$3.83 billion in the first quarter to NT$647 million and nosedived 96 percent from NT$15.82 billion a year earlier, company data showed.

Innolux’s average selling prices plunged 13.61 percent from US$338 in the first quarter to US$292 per square meter, an annual contraction of 26 percent from US$395 per square meter in the second quarter of last year, company data showed.

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