AU Optronics Corp (AUO, 友達光電), the nation’s second-largest LCD panel maker, yesterday posted its seventh consecutive quarter of profit as a weak New Taiwan dollar helped lift its gross margin in the last quarter.
Net profit grew sixfold to NT$6.58 billion (US$20.92 million) last quarter, compared with NT$1.08 billion in the same period of 2013, according to the company’s statement.
The figure represents a decline of 18.1 percent from NT$7.3 billion the previous quarter, as slack demand for tablets and notebooks offset better-than-expected seasonal demand for TVs. Favorable foreign exchange rates helped lift AUO’s gross margin to 14.8 percent last quarter, compared with 14.4 percent in the prior quarter.
The fourth-quarter profit brought AUO’s net profit last year to NT$18.07 billion — its best annual profit in six years.
“Last year was the second consecutive profitable year for us, and this is our most profitable year since 2008,” AUO chief executive officer Paul Peng (彭双浪) said at an investors’ teleconference.
“We believe this year will be a healthy period of growth for the global LCD industry in terms of supply and demand,” Peng said.
AUO expects growing replacement demand for higher-resolution TVs in developed countries. While in emerging markets, people would substitute traditional cathode-ray tube TVs and older smartphones with new flat-screen TVs and bigger-screen smartphones, the company said.
After seven profitable quarters, AUO has a significantly improved debt-to-equity ratio of 30 percent and it has managed to pay off NT$11 billion worth of debt, Peng said.
To support the company’s long-term profitability, Peng said the company “has to make the right investment at the right time.”
The firm plans to spend NT$40 billion this year on new facilities and equipment to expand its capacity to produce advanced panels, which should boost local production capacity by 5 percent, Peng said.
AUO plans to expand capacity at a domestic 8.5-generation plant and a new 6-generation plant in China. The production facilities are set to begin expanding inventories from next year.
Next year, AUO plans to budget NT$40 billion for capital spending, he said. Last year, AUO’s capital spending was NT$17 billion.
This quarter, shipments of TV and PC panels are expected to fall by between a high-single-digit and a low-teen percentage, while average selling price should be flat from last quarter, the company said. AUO blamed seasonally weak demand for the decline in shipments.
The firm’s factory loading rate would be unchanged at 93 percent, compared with last quarter, the firm said.
“We believe the first quarter will be the lowest point for AUO this year. We expect a gradual quarterly growth [in terms of bottom lines],” Peng said.
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