Lite-On Technology Corp (光寶科技) is upbeat on profitability this quarter as it trims its struggling smartphone camera module and mobile mechanics businesses.
The company last week announced that it has completed the transfer of its compact camera module business and recognized impairment and operating losses for its mobile mechanics business group.
The mobile mechanics business reported a net operating loss of NT$563 million (US$18.28 million) for the April-to-June period, the company said.
The compact camera module business, which supplied camera modules to high-end Chinese smartphone brands, generated an additional NT$1.04 billion in nonoperating losses, it said.
Lite-On is in a better position to improve profitability and gross margin could return to about 14 percent, CEO Warren Chen (陳廣中) told an earnings conference on Monday.
However, without further sales contribution from the two businesses, the company expects a hit to its top-line growth, he said.
The two businesses contributed about 11 percent and 16 percent of total sales in the first and second quarters respectively, company data showed.
Meanwhile, Chen was upbeat on the company’s optoelectronics business, as it has secured a place in the supply chain of a European tier-1 automaker.
Lite-On has gained a foothold in the more lucrative automotive market, Chen said, adding that shipments are expected to begin toward the end of next year.
“We can count on stable demand from automotive clients for the next five to seven years,” Chen said.
Operating profit contribution from optoelectronics last quarter jumped 227 percent quarter-on-quarter to NT$553 million, driven by automotive and outdoor LED lighting, he said.
Cloud computing, smart appliances and gaming consoles were bright spots for the company’s information technology business, which saw operating profit jump 79 percent quarterly to NT$1.3 billion, he added.
While the effects of an ongoing shortage of passive components are expected to subside in the second half of this year, suppliers’ efforts to expand output could be offset by rising demand for automotive applications, which use more components, Chen said.
Lite-On reported that net income in the second quarter dipped 1 percent annually to NT$1.76 billion, or earnings per share of NT$0.76, while sales rose 3 percent year-on-year to NT$54.71 billion.
Gross profit margin improved from 11.1 percent in the first quarter to 11.9 percent. Operating margin improved from 1.6 percent in June to 2.8 percent, company data showed.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in
With the US dollar expected to weaken in the next 12 months due to near-zero interest rates, investors should consider purchasing US corporate bonds, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Thursday. The bank said that the US Federal Reserve since last month has been buying bonds issued by US companies to curb default rates. The US dollar is forecast to be weaker against the pound, the euro and the yen, as well as the Canadian dollar, the Swedish krona and the Swiss franc, as the greenback lacks high investment returns after the Fed in March slashed the benchmark interest rate
A Bollywood actor’s face tattooed on his arm, Sandeep Bacche’s devotion shocks few in India where stars enjoy semi-divine status, but even there the hallowed silver screen might be losing its shine to streaming services and pandemic fears. “Whenever things get better and theaters begin operations, I will watch three movies a day for sure just as a way to celebrate,” said the Mumbai rickshaw driver, who is recovering from the virus himself. However, others might not join the party. With cinemas shut for months due to a COVID-19 lockdown, and little prospect they will reopen soon, frustrated Bollywood producers have turned to