Yageo Corp’s (國巨) founding chairman Pierre Chen (陳泰銘) is to resume his previous position of chief executive officer after the company saw net profit plunge 87 percent year-on-year last quarter, dragged by slower inventory digestion and sluggish demand.
Yageo, the world’s No. 3 multilayer ceramic capacitor (MLCC) supplier, said that its board of directors approved the personnel adjustment on Friday as the company continued to grapple with an industry slump and economic uncertainty stemming from the US-China trade dispute.
Five years ago, Chen relinquished his CEO position to Dora Chang (張綺雯), who was Yageo’s chief financial officer at the time.
The company expects to “make a seamless transition, as Chen has been well involved in the development of the passive components industry and the company’s operation strategies,” Yageo said in a statement.
“He will continue to lead Yageo’s expansion into high-end markets for automotive electronics and industrial segments, and enlarge the value of the industry, shareholders, customers and employees,” the company said.
The personnel adjustments are to take effect on Friday next week. Chang is also to be chairperson and CEO of Pulse Electronics Corp, a passive-components maker Yageo acquired in November last year for US$740 million.
Looking ahead, Yageo said it “remains conservative about its business outlook during the second half, with US-China trade disputes tipped to heighten,” Yageo said in the statement. “The company will deal cautiously with such a situation.”
The trade spat might dampen a nascent recovery after three quarters of inventory correction, the company said. Customer demand in Asia, the US and Europe is expected to pick up gradually amid decreasing excess inventory levels in its supply chain.
Net profit sank to NT$1.42 billion (US$45.26 million) in the quarter ended June 30, compared with NT$10.8 billion in the same period last year, the weakest quarterly net profit in eight quarters, Yageo said on Friday.
On a quarterly basis, net profit fell 45 percent from NT$2.59 billion in the first quarter, it said.
Earnings per share fell to NT$3.34 last quarter, compared with NT$6.11 in the previous quarter and NT$25.7 a year earlier.
Worsening earnings have made Yageo a big under-performer over the past seven months.
From Jan. 2 to Friday, its stock price fell 18 percent to NT$257, while the TAIEX rallied 10.14 percent in the same period.
Yageo shares have plunged 67.67 percent since they closed at NT$795 on Aug. 1 last year.
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