Wed, Aug 15, 2018 - Page 12 News List

Lite-On optimistic on profitability after shedding camera, mechanics businesses

By Ted Chen  /  Staff reporter

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.

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