Wistron Corp (緯創), one of the assemblers of Apple Inc iPhones, yesterday said net profit last year reached the highest in four years as gross margin climbed thanks to improved product portfolios.
Net income soared 26.33 percent to NT$4.91 billion (US$159.26 million), compared with NT$3.89 billion in 2017. That translated into earnings per share of NT$1.76, up from NT$1.48.
Gross margin improved to 4.22 percent, from 3.78 percent in 2017.
Revenue from server storage increased “a lot” last year, while smartphone contribution fell significantly, Wistron said.
The company did not provide a detailed revenue breakdown.
“The product mix this year will be similar to that of last year,” Wistron chairman Simon Lin (林憲銘) told a teleconference, answering an analyst’s question about whether the company would see smartphone contribution climb back to the 36 percent seen in the first quarter of 2017, from 15 percent last year.
“We do not see big quantity growth” from the smartphone business, Lin said.
However, Wistron “can maintain a low level of quantity at a break-even level in 2019,” he said.
The company’s ability to manage its mobile phone capacities are key to profiting from the smartphone manufacturing business, given high labor and component costs, Lin said.
Wistron has been suffering from overcapacity over the past few years, he said.
The company is adding new manufacturing sites in India to make smartphones, Lin said, adding that shipments would be low in the initial stage.
To circumvent high tariffs on Chinese goods imposed by the US, Wistron last year relocated its production lines to Taiwan, Malaysia and Mexico, Lin said.
The firm has no major relocation plans for this year, he added.
Capital spending would be minimal and kept between NT$7.5 billion and NT$8 billion this year, which would be the lowest in the past few years, Lin said.
This year, Wistron would continue to see slight growth in revenue, but that would still be a “healthy growth” under unfavorable global economic conditions, Lin said.
Server storage products would be one of the major bright spots, Lin added.
Wistron expects to gain new customers in the server storage area this year, he said.
Last year, Wistron saw its revenue grow 6.39 percent annually to NT$889.54 billion from NT$836.08 billion in 2017.
The company said its board of directors yesterday approved a cash dividend of NT$1.5 per common share, representing a payout ratio of 85 percent.
The board also approved a proposal to issue no more than 260 million new shares to fund development plans.
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