Compal Electronics Inc (仁寶) yesterday forecast a decline of more than 30 percent in first-quarter sales and forecast a flat outlook for the rest of the year.
“The coronavirus [COVID-19] outbreak in China heavily delayed our production after the Lunar New Year holiday... We had trouble gathering the necessary workers and shipments were quite low,” Compal president Martin Wong (翁宗斌) said, adding that the world’s largest laptop maker had resumed full production this month.
The company posted sales of NT$267.52 billion (US$8.84 billion) for the fourth quarter of last year, an increase of 7 percent from the previous year thanks to strong shipments of smart devices.
Gross margin improved from 3.2 percent to 3.6 percent due to higher shipments of non-PC products, and that helped boost net income by 12 percent to NT$2.01 billion, resulting in earnings per share of NT$0.47, the company said.
For the whole of last year, net income fell 22 percent to NT$6.96 billion, down from NT$8.91 billion in 2018, due to trade tensions between the US and China.
As a result, earnings per share shrunk from NT$2.05 to NT$1.6, Compal said.
The board of directors yesterday proposed a cash dividend distribution of NT$1.2 per share, representing a payout ratio of 75 percent.
For this year, Wong said PC and non-PC segment sales would maintain the same level as last year if the pandemic could be contained in the second half of the year.
“We might see a 5 to 7 percent [year-on-year] decrease in shipments this year if COVID-19 remains uncontained … and market demand would undoubtedly be affected,” he said, citing an International Data Corp forecast.
As the pandemic persists, more people would be working from home and this would boost sales for the company’s commercial segment while offsetting a potential sales decline in the consumer segment, he added.
Commercial and gaming laptops made up more than half of Compal’s PC shipments last year.
As the PC market slowly saturates, the company, which had more than a 25 percent share of global market last year, is seeking growth elsewhere, Wong said.
Non-PC sales are expected to contribute 35 percent of revenue this year and the figure is likely to rise to 40 percent in the long run, Wong said.
“We are looking at healthy demand for servers and wearable [devices], which have not been impacted by the spread of the virus,” he said.
Compal also predicted a more than 50 percent annual increase in automobile electronics sales, he said, adding that the company is maintaining its current schedule in expanding production in Vietnam, Taiwan and Brazil from China.
“Of course we are still studying the feasibility of moving production to Thailand and the Philippines,” he said, adding that the company is taking into consideration government policies as well as local economic outlooks.
It plans to increase its capital expenditure from NT$5 billion last year to NT$7 billion this year, he said.
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