Simplo’s Q1 profits down, but expects pickup in Q3

TRANSITIONAL PERIOD::Net profit fell 5.41% year-on-year on weak notebook demand, but the firm expects a boost as major clients ship new products this quarter

By Helen Ku  /  Staff reporter

Wed, May 08, 2013 - Page 13

Laptop battery pack maker Simplo Technology Co (新普科技) yesterday reported that net profit fell 5.41 percent year-on-year last quarter because of weak notebook demand and a seasonal slowdown.

The company, which also supplies battery packs for Apple Inc’s iPad, forecast that sales and profit would start picking up next quarter at the earliest as tablet makers launch new products in the second half of the year.

During the January-to-March period, Simplo’s net profit fell to NT$717 million (US$24.28 million), or earnings per share of NT$2.33, from NT$758 million during the same period last year.

The figure also dropped 24.29 percent from NT$947 million in the fourth quarter last year.

“Market demand was weak during the first quarter, a slow season for the tech industry,” Simplo chairman and chief executive officer Raymond Sung (宋福祥) told an investors’ conference.

“The company was also affected by the PC industry’s transformation, in which tablet computers are replacing notebooks,” he said.

Simplo forecast that second-quarter sales would be flat, between NT$11.3 billion and NT$11.7 billion, compared with the first quarter’s NT$11.5 billion.

Gross margin is expected to slide to between 11 percent and 11.1 percent this quarter from 11.49 percent last quarter as the company diversifies its product portfolio, the company said.

Net profit is estimated to decline between 5.3 percent and 13.8 percent to between NT$679 million and NT$618 million this quarter, with earnings per share of between NT$2.01 and NT$2.20, the company said.

As its major clients, including Apple, Dell Inc, Hewlett-Packard Co, Acer Inc (宏基) and Asustek Computer Inc (華碩), plan to ship new products from this quarter, Simplo expects sales to grow significantly next quarter.

“We remain upbeat about profitability in the second half of the year. We also hope to sustain our annual sales growth and post a new record [this year] after last year’s NT$58.83 billion,” Sung said.

Sung said he would like to see the New Taiwan dollar trade between NT$29.5 and NT$30.5 against the greenback to avert foreign-exchange risks.

The company’s new plant in Changshu, China, will begin operations this month, producing power supplies used in automobiles and smartphones.

Sung said the company forecast that sales of power supplies would reach NT$1 billion this year and double to NT$2 billion next year.

Simplo shares were unchanged at NT$127.5 yesterday.