Wed, Nov 13, 2019 - Page 12 News List

Inventec blames unfavorable foreign exchange rates for decline in profit

By Natasha Li  /  Staff reporter

Inventec Corp (英業達), an original design manufacturer for electronic devices, yesterday said net profit last quarter fell 32.32 percent annually to NT$1.06 billion (US$34.84 million) as it provided a mild outlook for this quarter.

Earnings per share was NT$0.3, down from NT$0.44 a year earlier.

The company blamed the decline mainly on disadvantageous exchange rates and production capacity adjustments.

Third-quarter revenue slipped 8.76 percent to NT$128.71 billion, while gross margin was flat at 4.7 percent, company data showed.

Despite the results, Inventec president Maurice Wu (巫永財) kept up the morale by predicting growth in all three of the company’s business segments.

“We are getting our hands on several high-end PC models this and the upcoming quarters,” Wu told investors during a teleconference, adding that the company has closed deals with new clients.

Shipments of servers would also increase, as the overall market has been predicted to expand 4 to 6 percent annually next year, Wu said.

The company is relocating some of its production lines from Chongqing in China’s Sichuan Province to a manufacturing site in Taoyuan’s Dasi District (大溪) after gaining the Ministry of Economic Affairs’ approval last month for its NT$4.8 billion-worth investment plan.

Wu has previously said that Inventec would move all of its US-bound laptop operations home.

Sales of PC and servers contributed about 79 percent to the company’s total revenue, while sales of smart devices contributed 20 percent, the company said.

Inventec Appliance Corp (英華達) president David Ho (何代水) said he aims to increase the contribution from smart devices next year through sales of smart speakers, wearable products, smart home devices and 5G-related applications.

He expects strong growth potential for smart devices, as applications such as artificial intelligence and big data are driving up demand, Ho said.

The company has also started shipping Internet of Things (IoT)-capable air purifiers this year, Ho said, adding that he hopes to increase shipments next year.

Ho said the company begun production at its plant in Georgetown, Malaysia, in January as it looks to lower trade risks and avoids US tariffs.

Meanwhile, it is also relocating part of its China production from Shanghai to Nanchang in a bid to lower production costs, Ho said, adding that he expects a better gross margin after the move.

In related news, contract electronics manufacturer Wistron Corp (緯創) yesterday posted a 28.02 percent increase in net profit to NT$1.72 billion for last quarter, up from NT$1.24 billion a year earlier.

Earnings per share grew from NT$0.44 to NT$0.61, the company said.

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