Delta Electronics Inc (台達電), the world’s top switching power supplies maker, posted record-high earnings and sales in the second quarter, as diversification into the industrial automation business started to bear fruit.
Earnings were up 37 percent from a year earlier to NT$4.76 billion (US$149 million) in the second quarter, translating to earnings per share of NT$2.05, up from NT$1.5 in the same period last year.
Sales were up 45 percent to NT$42.9 billion, and gross margin inched up to 21.9 percent from 21.2 percent. The company earned NT$2.95 billion in the first quarter on revenue of NT$33.5 billion.
“The industrial automation business has started to contribute to sales in a more significant way,” vice president Simon Chang (張訓海) told investors yesterday.
The company did not give guidance for the third quarter or the second half. However, CEO and vice chairman Yancey Hai (海英俊) said third-quarter prospects would be slightly better than the second quarter on the seasonality factor.
Delta set up its industrial automation division in 1995, but the business only took off in recent years thanks to booming industrial demand from emerging markets such as China and India, he said.
Emerging markets have been pursuing industrialization, needing automation solutions for factories to speed up and standardize the production of food and packaging, among other things.
Delta sells components and modules for industrial automation — such as inverters, converters, drivers and motors — and it aims to become a one-stop provider of automation solutions to help clients program and manage the whole operation, Hai said.
The industrial automation business accounted for 8 percent of Delta’s total sales in the first half of the year, up from 5 percent last year.
Hai said the division will continue its momentum by growing about 30 percent annually in the next few years.
Diversification into other renewable energy products such as display solutions — including 3D projectors and e-paper — has cut power supplies’ sales contribution to 53 percent in the first six months, down from 61 percent last year. The foray into industrial automation puts Delta head-to-head with established rivals from Europe and Japan, including ABB Group, Siemens AG, Yaskawa Electric Co and Fuji Electric Holdings Co, Chang said.
However, the company said its pricing strategy and a wide network of distributors around the globe would add to its competitiveness.
Delta has about 300 distributors for its industrial automation business in China and the number will increase to 1,000 to cope with demand, Hai said.
Meanwhile, Delta said it would start churning out electronic paper in the fourth quarter for e-readers, electronic tags and billboards.
The company said it is not making e-readers because end devices are not its manufacturing strength.
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