Lite-On Technology Corp (光寶科技) expects revenue and profitability to improve this year on the back of its recovering camera module business and the steadily growing solid-state drive (SSD) and power management businesses, a company executive said yesterday.
“We have fixed the problems of quality and production yield of camera modules at the end of last quarter. We believe the camera module business will again become a growth engine for Lite-On’s operations this year,” CEO Warren Chen (陳廣中) told an investors’ conference in Taipei.
Lite-On’s single and dual-camera lens modules are used in high-end Android smartphones. Its clients are mainly Chinese vendors, such as Oppo Mobile Telecommunications Co (歐珀移動) and Huawei Technologies Co (華為).
Last quarter was the worst for Lite-On’s camera module business in years, with revenue and profit plunging by double-digit percentages from a year earlier, Chen said.
Following a one-time asset impairment charge of NT$6.98 billion (US$238.8 million) in the third quarter of last year, the Taipei-based company reported net income of NT$2.62 billion for the whole of last year, its weakest earnings since 1999.
Earnings per share were NT$1.13, compared with NT$4.05 in 2016, company data showed.
Gross margin shrank 0.7 percentage points annually to 12.9 percent and operating margin dropped 1.6 percentage points to 5.5 percent, the data showed.
The company expects strong demand for power management and SSDs used in hyper-scale data centers to lend support to its operations this year, Chen said.
The company’s SSD joint venture with Tsinghua Unigroup Ltd (清華紫光) in Suzhou, China, received an injection of funds from the Chinese firm in December last year, and the collaboration helped secure a stable supply of NAND chips from Tsinghua Unigroup subsidiary Yangtze River Storage Technology (長江儲存), he said.
For this quarter, Chen said Lite-On’s revenue is expected to contract from last quarter due to the traditional slow season for the electronics industry, but business is expected to pick up from next quarter.
He declined to provide a revenue range forecast.
Lite-On’s board yesterday approved a cash dividend of NT$2.92 per share, which represents a payout ratio of 258 percent based on last year’s earnings of NT$1.13 per share and a yield of 6.95 percent compared with its closing price of NT$42 in Taipei trading yesterday.
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