Delta profit jumps on better product mix

By Helen Ku  /  Staff reporter

Wed, May 01, 2013 - Page 13

Delta Electronics Inc (台達電), the nation’s largest power supply maker, yesterday said its first-quarter net profit expanded 52.94 percent year-on-year due to a better product portfolio and operating expense controls.

During the January-to-March period, net profit grew to NT$4.19 billion (US$141.76 million) from NT$2.74 billion a year ago, with earnings per share rising to NT$1.73 from NT$1.13. Last quarter’s results expanded 41 percent from NT$2.98 billion (NT$1.23 per share) in the fourth quarter last year.

“The stronger-than-expected quarter-on-quarter growth in net profit was due to enhanced management efficiency, as well as an improved product mix structure,” Delta chairman Yancey Hai (海英俊) told an investors’ conference.

Delta’s gross margin was 25.6 percent — the second-highest level in the company’s history — during the first quarter, which was slightly down from the 25.8 percent in the previous quarter, but up from the 22.2 percent recorded a year earlier.

Operating margin for the first quarter rose to 10.9 percent from 10.2 percent in the fourth quarter and was compared to 7.5 percent a year earlier.

Hai said the results were due to higher shipments of high-margin industrial automated machines and products designed to offer online services, as well as the firm’s better control on production flow and raw material costs.

Hai said the company had experienced a contraction in the traditional PC market, after clients placed less orders for desktop and laptop power supply units.

However, with orders for non-PC products this quarter expected to offset a weak PC market, the company expects second-quarter sales would increase sequentially, he said.

Power solutions still accounted for a majority of Delta’s total sales at 59 percent last quarter, while “green” product business accounted for 19 percent, energy management business 18 percent and other businesses 4 percent.

Delta is optimistic about its sales of industrial automation machines — which are high value-added products and accounted for between 9 percent and 10 percent of its total sales last quarter — as the company has received “quite a lot of orders” for such machines from electronics companies since last quarter, it said.

This year, Delta plans to keep its capital expenditure within NT$10 billion, mainly for expanding production capacity at its subsidiary Cyntec Co (乾坤科技) by 30 percent to 40 percent.

Delta closed unchanged at NT$141.50 yesterday.

This story has been updated since it was first published.