Yageo Corp (國巨) on Thursday proposed lowering its paid-in capital by 20 percent as part of its financial restructuring plan.
The world’s third-largest multi-layer ceramic capacitor supplier proposed at a board meeting to reduce its capital by NT$1.08 billion (US$38.08 million) to NT$4.32 billion, joining a growing list of technology companies that have sought to lower capital and boost earnings per share.
The company said it would distribute NT$2 in cash for every share to complete the capital reduction.
Photo: Chang Hui-wen, Taipei Times
Additionally, Yageo proposed a cash dividend of NT$10 per share based on last year’s earnings per share of NT$46.46.
Overall, shareholders would receive NT$12 per share if the dividend payout and capital reduction proposals are approved at the company’s annual general meeting on June 8.
It would be the fifth capital reduction Yageo has undertaken since 2013. As of 2017, Yageo’s paid-in capital had been reduced through four capital reductions from NT$22.1 billion in 2013 to NT$3.5 billion.
The company’s capital increased after 2017 to NT$5.4 billion through acquisitions and mergers, such as the purchase of US-based Pulse Electronics Corp in 2018 for NT$22 billion, before acquiring another US rival, Kemet Corp, for US$1.64 billion in 2020.
The latest capital reduction is expected to boost Yageo’s earnings per share to NT$60 next year, analysts said.
Yageo posted a net profit of NT$22.90 billion for last year, up 90.7 percent from a year earlier, while its consolidated sales hit a new high of NT$106.54 billion, up 57.4 percent from a year earlier.
Gross margin improved by 2.8 percentage points from a year earlier to 40.4 percent.
Yageo said it expects sales for the first quarter of this year to grow between 11 percent and 14 percent from NT$25.69 billion a quarter earlier on the back of an increase in shipments of high-end passive electronics components.
Its business could be affected by the military conflict between Russia and Ukraine, although it does not import any raw materials from either country, the company said.
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