Benq expects higher profits on a 30% rise in sales

Benq Corp (明電), a Taiwan maker of mobile phone handsets and flat-panel displays, expects profit to be higher this year than last, and sales to rise 30 percent this year, boosted by a recovery in demand.

Benq will probably post profit of between NT$2.4 billion (US$69 million) and NT$3 billion for last year, compared with NT$4.6 billion in 2000, and sales probably rose 12 percent to about NT$70 billion, said company Financial Controller Alex Liou in a phone interview.

Benq, whose shares rose 85 percent last year, has gained increased orders from customers such as Motorola Inc and NEC Corp. Mobile phone makers are also betting on an economic rebound worldwide and on increased sales of handsets that allow speedier Internet access and data transfer.

"Growth will come from all our businesses, led by" LCDs, Liou said. Benq, which made 6.8 million mobile-phone handsets last year, could make at least 30 percent more this year, he said.

The company may "at least double" last year's sales of 1.1 million computer displays, sold to customers such as IBM Corp. and Dell Computer Corp, Liou said. Half of last year's output was produced in the fourth quarter.

The company, formerly called Acer Communications & Multimedia Inc, makes half of its products in Taiwan, 30 percent in China and 20 percent in Malaysia. Benq produces disk drives and read-only-memory compact discs as well as phones and monitors.

Meanwhile, Acer Inc (宏電), the only PC maker in Taiwan with an international brand name, said it expects to post a profit for last year helped by the sale of equity investments, and boost net income this year.

Acer, which posted its first quarterly loss in almost a decade in the third quarter, may have an operational loss for last year, company spokesman Henry Wang (汪島雄) said in an interview. Still, profit will rise this year as the company cuts costs and reorganizes its business, he said.

"We have revamped our strategy, reduced our product lines and refocused on markets with growth potential such as Greater China," Wang said. "This year, we have a higher chance of earning more."

Acer, which began restructuring in December 2000 by separating its manufacturing and brand-name businesses, is firing workers and selling unprofitable units. The company may trim as many as 5 percent of its workers in Taiwan after reviewing their performance, J.M. Cheng, an assistant vice president, human resources, said.

The company is revising policies such as bonuses and promotions, Cheng said. Acer employs about 5,000 workers, half of them in Taiwan.

"The changes haven't been finalized," Cheng said. "The number asked to leave eventually may be fewer than expected." Acer, which holds half-yearly reviews, will give underperformers three months after their appraisals to improve, Cheng said. The reviews have yet to start.

Shares of Benq rose as much as 4.8 percent to NT$50.50, and recently changed hands at NT$49.8.

Acer shares fell 4.5 percent to NT$21.10.