Innolux Corp (群創), the world’s No. 3 LCD panel manufacturer, yesterday reported a net loss of NT$6.72 billion (US$199.52 million) for last quarter, the worst performance in three years, as demand for various applications plunged amid a global slowdown.
The Miaoli-based company expects the market to remain soft this year, with shipments likely shrinking by double percentage digits in the current quarter.
“Customers have adopted a conservative outlook as the market faces global headwinds, which started in the third quarter of last year,” Innolux president Wang Jyh-chau (王志超) told an investors’ conference.
Revenue totaled NT$81.46 billion in the October-to-December period, down 8.2 percent from the preceding quarter and 29.13 percent from a year earlier, a company report showed.
Its gross profit margin dropped from 12.1 percent to 3.1 percent, as a supply glut brought prices down, the report said.
Core operations incurred losses of NT$2.9 billion, while non-core businesses lost another NT$3.73 billion, the report showed. The results translated into a loss per share of NT$0.68.
Shipments of large panels could decline 10 percent this quarter, with average selling prices falling by 5 to 8 percent, Wang said.
Small and medium-sized panels are expected to fare weaker, with shipments likely contracting by 15 to 20 percent, but selling prices may hold steady, Wang said.
Innolux is seeking to boost cost efficiency and develop niche-market products, Wang said.
As niche-market devices tend to be short-lived, Innolux had better make sure it remains competitive in panels used in television sets, the company’s main product, Wang said.
TV shipments are likely to stay flat or grow mildly this year from last year due mainly to an increase in panel size, Wang said, adding that the trend might not reverse oversupply, as companies continue to increase capacity.
In China, the largest destination for Taiwanese exports, demand for 40-inch panels could pick up this year, while sales of 32-inch panels might slow down, Wang said, adding that the overall situation might improve in the second half depending on the pace of recovery.
For the whole of last year, Innolux posted NT$10.82 billion in net income, representing a decrease of 50.1 percent from a year earlier, and earnings per share of NT$1.09, the report said.
Capital expenditure is projected to reach NT$35 billion this year, a 42.8 percent jump from NT$24.51 billion last year, Wang said.
Innolux expects demand from commercial and consumer electronic devices to decline 3 percent this year. Sales of panels used in smartphones might increase 8 to 9 percent this year, while panels used in laptops might hold steady, Wang said, assuming inventories for monitor devices stand at healthy levels.
Innolux shares closed up 0.31 percent at NT$9.65 yesterday, bucking the TAIEX’s 0.32 percent fall, according to Taiwan Stock Exchange data.
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