Hon Hai Precision Industry Co (鴻海精密) yesterday said net profit last year fell 10.66 percent to NT$115.31 billion (US$3.81 billion), its third consecutive year of decline and the lowest in about six years.
Net profit in 2018 was NT$129.07, a financial statement from Apple Inc’s largest iPhone assembler showed.
Earnings per share rose to a three-year high of NT$8.32, due to a 20 percent reduction in share capital.
Photo: David Chang, EPA-EFE
Consolidated revenue inched up 0.93 percent on an annual basis to NT$5.34 trillion, a record high, but gross margin dipped 0.36 percentage points to 5.91 percent.
Hon Hai, which makes about 50 percent of its net profit in the fourth quarter each year, saw last quarter’s profit fall 23.71 percent year-on-year to NT$47.77 billion, while revenue contracted by 3.87 percent to NT$1.74 trillion, which it blamed on lower-than-expected sales of electronic components.
Hon Hai chairman Young Liu (劉揚偉) earlier this month predicted a 15 percent drop this quarter in sales across business segments from the fourth quarter as the COVID-19 crisis affected the firm’s production in China.
Production is expected to be back on track in the second quarter, Liu said, adding that annual revenue growth was expected to be between 1 and 3 percent.
Burdened since last year by rising US duties on its made-in-China products, Hon Hai, known as Foxconn Technology Group (富士康科技集團) outside of Taiwan, has posted single-digit annual growth in monthly revenue since June, while reporting double-digit declines in sales over the past three months amid the coronavirus outbreak.
Hon Hai founder Terry Gou (郭台銘) has voiced concerns over weakening market demand as COVID-19 spreads in the US as well as disruptions across supply chains in Japan and South Korea.
To diversify its production risks, Hon Hai has increased investments in Vietnam by US$25.1 million.
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