Sat, Nov 09, 2019 - Page 12 News List

Innolux quarterly losses deepen

SPENDING CUT?Average selling prices slid 2.79% to US$279 per square meter from US$287 in the April-to-June period, while shipments also fell, the firm said

By Lisa Wang  /  Staff reporter

Innolux Corp (群創), an LCD panel manufacturing arm of Hon Hai Precision Industry Co (鴻海精密), yesterday posted deeper quarterly losses for last quarter as muted seasonal improvement continued to drag on TV panel shipments and prices.

Net losses widened from NT$2.97 billion (US$97.66 million) in the second quarter to NT$3.89 billion in the July-to-September period, reversing net profit of NT$1.91 billion in the third quarter last year, company data showed.

Operating losses last quarter rose to NT$4.85 billion from losses of NT$3.34 billion in the prior quarter, the company said in a statement.

Operating margin fell to minus-7.7 percent last quarter from minus-5.3 percent a quarter earlier.

Non-operating gains of NT$1.4 billion on Innolux’s books last quarter helped prevent the losses from dipping further, it said, adding that non-operating income was NT$576 million in the second quarter.

Average selling prices last quarter slid 2.79 percent to US$279 per square meter from US$287 in the April-to-June period, while shipments dropped 2.9 percent sequentially, it said.

To cope with an industry slump, Innolux said it is mulling a slight cut to capital spending from an estimated NT$28.8 billion for the whole of this year.

The company has spent NT$20.3 billion on new facilities and equipment this year.

Innolux said it expects prices for large TV panels to stabilize this quarter, as clients are replenishing inventory to cope with demand during year-end shopping.

TV, PC PANELS

The company forecast that prices for TV and PC panels would be flat this quarter from a quarter earlier.

Shipments for TV and PC panels are to hold steady this quarter as well, it said.

Innolux gave a more positive outlook for this quarter than local rival AU Optronics Corp (友達光電), which forecast that its shipments of TV and PC panels would plunge 15 percent sequentially, with selling prices to drop by a single-digit percentage, citing pressure from a supply glut in China.

Innolux was upbeat about demand for small and medium-sized panels for mobile phones, saying that supply constraints are driving up prices.

Overall, it expects small and medium-sized panel prices to climb about 5 percent sequentially this quarter, but shipments might drop about 5 percent quarter-on-quarter, the company said.

Commenting on its TV set assembly business, Innolux said that it has reached 70 percent of its shipment goal of 2.5 million units for this year.

The imposition of 15 percent tariffs on TVs from China curtailed demand, it said.

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