Taiflex Scientific Co (台虹科技), which manufactures flexible printed circuit boards (PCB) and solar backsheets, yesterday reported net income last quarter dropped 10.78 percent annually to NT$121.4 million (US$3.76 million), with earnings per share falling to NT$0.6, due to the slack season and foreign-exchange losses.
In the first quarter, consolidated revenue increased 19.9 percent annually to NT$2.28 billion, which the company attributed to a low comparison base in the same period last year, especially in the solar market.
The sales of the company’s photovoltaic (PV) backsheets increased 35.3 percent to NT$1 billion from the same period a year earlier, while its main product — flexible copper clad laminate (FCCL) — posted a revenue increase of 12.5 percent annually to NT$1.26 billion.
However, on a quarterly basis, sales of FCCL decreased 15.5 percent, while sales of PV backsheets dropped 28.7 percent. FCCL and PV backsheets accounted for 55 percent and 44 percent respectively of the firm’s total sales last quarter.
“Our utilization rate dropped quarterly from more than 80 percent to about 70 percent, while shipments of high-margin products also declined in the quarter, resulting in a decline in last quarter’s gross margin,” Taiflex deputy spokesman Charles Chang (張啟訓) said at an investors’ meeting.
The company’s gross margin last quarter decreased 4.3 percentage points annually, or 1.1 percentage points quarterly, to 19 percent.
Chang said that the company booked foreign-exchange losses of NT$40 million for the January-to-March quarter, mostly because of the depreciation of the New Taiwan dollar against the US dollar.
For this quarter, Taiflex said revenue would rise 8.32 percent annually to between NT$2.4 billion and NT$2.9 billion, while gross margin could rebound to about 20 percent.
The utilization rate is expected to be more than 80 percent this quarter, as the number of working days in this quarter are back to normal and smartphone demand in the Chinese market seems stable, Chang said.
As for the generally pessimistic outlook over Apple Inc’s products due to its poor results last quarter, Taiflex said that downward pressure would be present, but new Apple products might still show strong performances this quarter.
“Sales of electronic products are expected to grow gradually toward the third quarter,” Chang said.
Taiflex’s electronic products, such as FCCL, can be applied to smartphones, tablets and other items, with the US market consuming about 53 percent of its orders, while the Chinese market accounted for 31 percent last year.
The solar market’s outlook is unclear, Chang said, adding that the firm would have to assess demand in China and whether Beijing’s subsidy program would resurface this year.
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