Innolux Corp (群創), a flat-panel manufacturing arm of Hon Hai Precision Industry Co (鴻海精密), yesterday said that its losses improved to NT$2.97 billion (US$95.58 million) last quarter from losses of NT$3.73 billion in the previous quarter, as average selling prices (ASPs) improved.
That was the third straight quarterly loss for Innolux, as a supply glut and flagging demand, mainly for televisions, continued to depress panel prices.
Bucking the price downtrend, the Miaoli-based LCD panel maker managed to eke out a 1 percent gain in ASP to US$279 per square meter during the quarter ending June 30, from US$276 per square meter in the first quarter, by focusing on high-specification panels.
Gross margin improved to 3.7 percent last quarter from 1.5 percent in the first quarter, the company said in a statement.
Earnings before interest, taxes, depreciation and amortization (EBITDA) grew 31.7 percent to NT$5.49 billion, compared with NT$4.17 billion in the first quarter, proof that the company continued to generate positive cash flows from its operation, it said.
On an annual basis, losses swelled from minus-NT$1.93 billion in the second quarter last year.
EBITDA were also down from NT$9.75 billion a year earlier.
Shipments of flat panels used in TVs and PCs are expected to remain flat this quarter, compared with last quarter, Innolux said, adding that it hoped the Double-Eleven and Double-Twelve holiday shopping sprees in China and Black Friday shopping in the US would bolster panel demand.
As demand crawls back, TV panel prices should recover gradually this quarter, it said.
However, blended ASP for TV and PC panels is forecast to drop 3 percent sequentially this quarter, it said.
Shipments of small and medium-sized panels are expected to drop by less than 10 percent, while ASP should climb by 7 to 9 percent, it said.
TV and PC panels accounted for 42 percent of Innolux’s revenue last quarter of NT$63.18 billion, down from 41 percent in the prior quarter.
Flat panels used in handsets made up 28 percent, up from 27 percent a quarter earlier.
Innolux said that capital expenditure last quarter was NT$8.5 billion.
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