Telecom equipment maker Sercomm Corp (中磊) yesterday said that net profit last quarter expanded 34 percent year-on-year as remote study and work-from-home trends amid the COVID-19 pandemic boosted Internet use.
The growth momentum is expected to magnify in the second half of the year, as the world is still trying to contain the pandemic, Sercomm said, adding that it expects revenue to grow this quarter and next quarter.
“We are cautiously optimistic about the market demand in the second half. Customers largely have confirmed their orders for the fourth quarter for fear of component supply constraints,” Sercomm president James Wang (王煒) told an investors’ conference in Taipei. “The company’s order visibility is relatively higher than in past years.”
Photo: Wang Yi-hung, Taipei Times
Revenue last quarter surged 36 percent sequentially to NT$9.25 billion (US$313.13 million), with fixed-mobile products contributing the most.
Contribution from 5G-related products, including customer-premises equipment (CPE), is expected to begin next year, Wang said.
In the US and Europe, telecoms plan to use 5G CPE to replace expensive fiber-optical networks in the rural areas, he said.
The company is also developing small cell stations supporting 5G technology, he said.
However, travel restrictions have somewhat delayed its development of 5G products, as some testing and discussions were slowed, he said.
In the April-to-June period, Sercomm’s net profit expanded to NT$241 million from NT$180 million in the corresponding period last year. That translated into earnings per share of NT$0.97, up from NT$0.73 in the preceding year.
On an annual basis, net profit expanded 2.77 times from NT$87 million.
Gross margin dropped to 14.8 percent last quarter from 17.6 percent in the prior year, attributable to higher operating expenses, which soared 42.7 percent to NT$7.88 billion, from NT$5.52 billion a year earlier.
The pandemic “provides a boon to networking companies,” Sercomm chairman Paul Wang (王伯元) said. “Because of the pandemic, we have seen major changes in our life. Data [transmission] has increased a few times because of pandemic-induced telecommuting, remote education and remote surveillance.”
With the fallout from the pandemic and a US-China trade dispute, Sercomm has moved its manufacturing capacity from China to Taiwan, the Philippines and India.
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