Tue, Jun 11, 2019 - Page 12 News List

Delta cautiously optimistic about next six months

MORE COMPLICATIONS?Delta Electronics Co chairman Yancey Hai said end demand would suffer in the event that the US introduced additional tariffs on goods from China

By Natasha Li  /  Staff reporter

Delta Electronics chairman Yancey Hai attends the company’s annual general meeting in Taipei yesterday.

Photo: Chen Jou-chin, Taipei Times

Delta Electronics Co (台達電), the nation’s leading power and thermal solutions provider, remains cautiously optimistic about the second half of the year, chairman Yancey Hai (海英俊) said at the company’s annual general meeting yesterday, citing market uncertainties.

While the second half traditionally brings in more revenue, Hai said that the unresolved trade conflict between the US and China has caused market volatility, especially with the recent US trade restrictions on Huawei Technologies Co (華為).

Delta provides fans and passive components to Huawei, contributing less than 1 percent to the company’s revenue, Hai said.

The overall supply chain has been affected by the moves against Huawei and more complications could arise as the industry looks to rebuild the supply chain, he said.

Hai, alluding to the black swan theory, discussed the likelihood that US President Donald Trump’s administration would introduce tariffs on another US$300 billion in Chinese goods, warning that end demand would suffer the repercussions.

Delta reported revenue of NT$24.56 billion (US$781.27 million) for last month, an increase of 23.99 percent from a year earlier, with the power electronics segment accounting for 50 percent of overall sales, followed by the infrastructure segment with 36 percent and the automation segment with 14 percent.

Cumulative revenue grew 14.77 percent annually to NT$102.09 billion in the first five months of the year, it said.

Delta predicts that 5 to 7 percent of its revenue has been affected by the ongoing US-China trade tensions, with the networks and communications segment suffering the most.

To circumvent US tariffs, Delta has moved a majority of its advanced production lines for its networks and communications business to Taiwan, Hai said.

The company has also expanded, setting up production lines in Thailand, India and Slovakia, he added.

Delta in April acquired a 63.78 percent stake in Delta Electronics (Thailand) PCL (泰達電).

At yesterday’s meeting, shareholders approved a proposal to distribute a cash dividend of NT$5 per share, which would represent a payout ratio of 71.43 percent based on last year’s earnings per share of NT$7 and imply a dividend yield of 3.3 percent based on the stock’s closing price of NT$151.5 in Taipei trading yesterday.

This story has been viewed 1895 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top