Yageo to buy back stock to improve shareholder value

By Lisa Wang  /  Staff reporter

Sat, May 04, 2013 - Page 14

Yageo Corp (國巨), which makes passive components used in electronics, yesterday said its board approved a proposal to buy back 30 percent of its shares in an effort to boost return on equity and to better utilize its cash.

Should the plan be approved, Yageo shareholders would receive cash payment of NT$3 per share, the company said in a statement. The company’s share capital would then be reduced to about 1.54 billion shares, from 2.21 billion shares. That represents about a 32 percent dividend, compared with the closing price of NT$9.39 yesterday.

“The scheme is expected to enhance shareholder value by adjusting the company’s capital structure, while improving both operational and financial performance indicators,” the firm said.

In a separate statement issued yesterday, Yageo said its net income expanded to NT$194 million, or earnings per share of NT$0.09, in the first quarter this year, compared with NT$49 million, or earnings per share of NT$0.02, in the fourth quarter last year.

Gross margin improved to 19.9 percent in the first quarter, from 19.1 percent in the previous quarter.

On an annual basis, net income contracted 13 percent from NT$224 million in the first quarter last year.

As of the end of March, Yageo had NT$11.93 billion in cash equivalents, the statement said.

Yageo said overall demand for passive components remained uncertain. The company said it would continue to focus on its core business, while investing in research and development to expand its business in Europe and the US.