Tue, Jun 16, 2020 page12

• Virus Outbreak: Virus casts haze over outlook: Lite-On

  UNCERTAIN TIMES: Despite good order visibility for the third quarter, a top company official said it is hard to predict demand as clients could ‘easily delay or cancel’ orders

  • By Natasha Li / Staff reporter
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  Electronic component manufacturer Lite-On Technology Corp (光寶科技) yesterday gave a hazy outlook for business in the second half of the year due to the COVID-19 pandemic.

  “From what we know, the coronavirus is still spreading, with new cases in Beijing, as well as in the US and South America… There is a lot of uncertainty which is fostering [economic] instability from a global perspective,” Lite-On vice chairman and chief operating officer Warren Chen (陳廣中) told a news conference after the company’s annual shareholders’ meeting in Taipei.

  Although Lite-On has good order visibility for the third quarter, Chen expressed doubts about its future performance.

  

  Lite-On Technology Corp vice chairman and chief operating officer Warren Chen poses for a photograph at a press conference following the company’s annual shareholders’ meeting in Taipei yesterday.

  Photo: Chen Jou-chen, Taipei Times

  “We can no longer rely on clients’ orders to predict market demand,” as clients could “easily delay or cancel” orders, Chen said.

  The third quarter is usually the high season for electronics, but given the prevailing uncertainty, Chen forecast a year-on-year decline in sales in the second half of the year.

  “Nevertheless, the second half would be better than the first half, as we would have more working days,” he said.

  With production and shipments hampered by the COVID-19 outbreak in China, Lite-On’s first-quarter sales dropped 20.88 percent annually to NT$32.58 billion (US$1.09 billion).

  Thanks to strong shipments of power supplies and other electronic components for PCs, servers, and networking and communications devices, the company reported sales of NT$13.75 billion in April, up 1.57 percent from a year earlier.

  However, Lite-On saw sales plummet again by 7.3 percent year-on-year last month, as demand from the US shrank.

  With the ongoing protests and high unemployment in the US, “it would be a long time before business returns to normal,” Chen said, adding that a full recovery is unlikely before the end of the year.

  Lite-On has resumed operations at its plants in Mexico and Brazil, while its Indian plant remains partially closed, Chen said.

  Its production sites in Kaohsiung, Thailand and Vietnam have not been affected by the pandemic, he added.

  Focusing on shifting its production out of China, Chen said that Lite-On expects to ship about 20 percent of its total production — up from 15 percent at present — from these sites by the end of the year.

  The company’s shareholders yesterday approved a cash dividend distribution plan of NT$3.2 per common share, representing a payout ratio of 79 percent based on earnings per share of NT$4.03 last year.
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