Yageo Corp’s (國巨) founding chairman Pierre Chen (陳泰銘) is to resume his previous position of chief executive officer after the company saw net profit plunge 87 percent year-on-year last quarter, dragged by slower inventory digestion and sluggish demand.
Yageo, the world’s No. 3 multilayer ceramic capacitor (MLCC) supplier, said that its board of directors approved the personnel adjustment on Friday as the company continued to grapple with an industry slump and economic uncertainty stemming from the US-China trade dispute.
Five years ago, Chen relinquished his CEO position to Dora Chang (張綺雯), who was Yageo’s chief financial officer at the time.
The company expects to “make a seamless transition, as Chen has been well involved in the development of the passive components industry and the company’s operation strategies,” Yageo said in a statement.
“He will continue to lead Yageo’s expansion into high-end markets for automotive electronics and industrial segments, and enlarge the value of the industry, shareholders, customers and employees,” the company said.
The personnel adjustments are to take effect on Friday next week. Chang is also to be chairperson and CEO of Pulse Electronics Corp, a passive-components maker Yageo acquired in November last year for US$740 million.
Looking ahead, Yageo said it “remains conservative about its business outlook during the second half, with US-China trade disputes tipped to heighten,” Yageo said in the statement. “The company will deal cautiously with such a situation.”
The trade spat might dampen a nascent recovery after three quarters of inventory correction, the company said. Customer demand in Asia, the US and Europe is expected to pick up gradually amid decreasing excess inventory levels in its supply chain.
Net profit sank to NT$1.42 billion (US$45.26 million) in the quarter ended June 30, compared with NT$10.8 billion in the same period last year, the weakest quarterly net profit in eight quarters, Yageo said on Friday.
On a quarterly basis, net profit fell 45 percent from NT$2.59 billion in the first quarter, it said.
Earnings per share fell to NT$3.34 last quarter, compared with NT$6.11 in the previous quarter and NT$25.7 a year earlier.
Worsening earnings have made Yageo a big under-performer over the past seven months.
From Jan. 2 to Friday, its stock price fell 18 percent to NT$257, while the TAIEX rallied 10.14 percent in the same period.
Yageo shares have plunged 67.67 percent since they closed at NT$795 on Aug. 1 last year.
UNCERTAINTY: Investors remain worried that trade negotiations with Washington could go poorly, given Trump’s inconsistency on tariffs in his second term, experts said The consumer confidence index this month fell for a ninth consecutive month to its lowest level in 13 months, as global trade uncertainties and tariff risks cloud Taiwan’s economic outlook, a survey released yesterday by National Central University found. The biggest decline came from the timing for stock investments, which plunged 11.82 points to 26.82, underscoring bleak investor confidence, it said. “Although the TAIEX reclaimed the 21,000-point mark after the US and China agreed to bury the hatchet for 90 days, investors remain worried that the situation would turn sour later,” said Dachrahn Wu (吳大任), director of the university’s Research Center for
Alchip Technologies Ltd (世芯), an application-specific integrated circuit (ASIC) designer specializing in artificial-intelligence (AI) chips, yesterday said that small-volume production of 3-nanometer (nm) chips for a key customer is on track to start by the end of this year, dismissing speculation about delays in producing advanced chips. As Alchip is transitioning from 7-nanometer and 5-nanometer process technology to 3 nanometers, investors and shareholders have been closely monitoring whether the company is navigating through such transition smoothly. “We are proceeding well in [building] this generation [of chips]. It appears to me that no revision will be required. We have achieved success in designing
PROJECTION: KGI Financial said that based on its foreign exchange exposure, a NT$0.1 increase in the New Taiwan dollar would negatively impact it by about NT$1.7 billion KGI Financial Holding Co (凱基金控) yesterday said its life insurance arm has increased hedging and adopted other moves to curb the impact of the local currency’s appreciation on its profitability. “It is difficult to accurately depict the hedging costs, which might vary from 7 percent to 40 percent in a single day,” KGI Life Insurance Co (凱基人壽) told an investors’ conference in Taipei. KGI Life, which underpinned 66 percent of the group’s total net income last year, has elevated hedging to 55 to 60 percent, while using a basket of currencies to manage currency volatility, the insurer said. As different
Taiwanese insurers are facing difficult questions about the damage of recent swings in the New Taiwan dollar. Regulators might have a partial solution: letting firms change how they calculate the value of foreign currency assets. The Financial Supervisory Commission (FSC) is considering allowing insurers to use six-month average exchange rates when they calculate risk-based capital in their semiannual reports, a shift from the current system where insurers use exchange rates on the final day of reporting. The change could ease pressure on the US$1.2 trillion insurance sector, whose huge exposure to foreign assets came into the spotlight earlier this month after a
RSS