E Ink says strong e-reader sales help to boost revenue

By George Liao  /  Staff reporter

Wed, Aug 08, 2012 - Page 13

E Ink Holdings Inc (元太科技) said yesterday it expected revenue to expand further in the second half of this year from the first half.

“The company’s revenue in the second half will grow significantly from the first half as the company’s main products are mostly used in consumer electronic products,” chairman Scott Liu (劉思誠) told investors yesterday.

Liu said it was also because of seasonal factors, with E Ink’s shipments in the second half generally higher than the first half.

NEW MARKETS

In addition, clients in North America will continue to roll out new products in the second half and next year, which will contribute to the stability of demand for e-book readers in this region, Liu said.

For example, Barnes & Nobles Inc’s new e-book readers released in May were sold out within two weeks, he added.

In Europe, most publishers and physical bookstores have been gradually joining the trend toward digital reading while there have been a lot of exciting developments in Japan within the sector, Liu said.

Rakuten Inc, a Japanese electronic commerce and Internet company based in Tokyo, rolled out its e-book readers last month with shipments of 100,000 units, Liu said.

AMAZON.COM

Liu also said that Amazon.com Inc chief executive officer Jeff Bezos said in an interview with Japanese media that Kindle would enter the Japanese market this year.

“We were also surprised by Russian and Middle Eastern markets because demands in these two regions were higher than we expected, which will be a driver for our growth in the future,” he said.

The company yesterday released its second-quarter results, showing a net loss of NT$818 million (US$23.2 million) in the quarter, or a net loss per share of NT$0.76, which was larger than its net loss of NT$787 million, or a net loss per share of NT$0.73, in the first quarter.

On a yearly basis, E Ink reported a net profit of NT$1.33 billion, or earnings per share of NT$1.22, last year, the company’s data showed

Consolidated revenue was NT$4.48 billion last quarter, up 17 percent sequentially, but down 35.35 percent from NT$6.93 billion a year earlier. Gross margin dropped to 0.6 percent from 1.1 percent in the first quarter and 32.5 percent a year ago, the data showed.

To improve profitability, E Ink will focus on applications other than e-books in the future, Liu said, adding that demand from e-tags for convenience stores and supermarkets would explode next year, which would help to drive up growth.

BUYOUT DEAL

On the buyout of local rival SiPix Technology Inc (STI, 達意科技), a deal the company announced on Friday last week, Liu said E Ink had reached agreement with three major shareholders to acquire 82.7 percent of the company and the company’s goal is to now obtain a 100 percent stake by the end of this year.

“STI owns more than 200 patents globally,” Liu said. “After incorporating STI’s technology, E Ink will have broader applications in e-paper technology and patents, which will help our performance.”