LCD panel maker AU Optronics Corp (AUO, 友達光電) yesterday introduced its first share capital reduction program and a NT$55.77 billion (US$1.94 billion) return distribution program in a three-year span starting this year.
The program’s aim is to improve shareholders’ long-term return on equity, the company said.
AUO shareholders this year are to receive a cash dividend of NT$3 per share, including NT$1 from last year’s earnings and NT$2 paid back by the company through a 20-percent share capital reduction plan.
Photo: Chen Mei-ying, Taipei Times
The company expects share capital to fall to NT$76.99 billion after the program takes effect in June.
As a result, AUO’s payout ratio would reach 46.5 percent based on the company’s earnings per share last year of NT$6.44. The distribution would cost the company NT$28.82 billion this year, it said.
The distribution program reflects AUO’s long-term efforts to improve its financial structure and to transform itself into a supplier of valued-added flat panels, the company said.
The value-added products, which include premium panels and other products used in vehicles, medical devices and industrial equipment, are less exposed to industry fluctuations, and contributed about 50 percent to the company’s revenue last quarter, it said.
“AUO has confidence that it can reduce the influence of industry cycles and generate a balanced operating cash flow. We commit to delivering stable and clear three-year shareholder returns to enhance long-term shareholder equity and corporate values,” AUO chairman Paul Peng (彭雙浪) told a media briefing in Taipei yesterday.
“To cope with the rapidly growing LCD panel industry, the company has broadened operational scale through share capital expansion. We now believe the company is capable of generating better profits with streamlined share capital,” he said.
AUO does not expect the outlays to affect operations and investments in new manufacturing facilities, given its ability to generate healthy cash flow, Peng said, adding that the company last year generated about NT$104.7 billion in cash from operations, helping to reduce AUO’s net debt-to-equity ratio to minus-10.6 percent at the end of last year.
The company has accumulated NT$80.67 billion in retained earnings and NT$60.06 billion in capital surplus, he said.
AUO last month announced an investment in a G8.5 production line in Taichung, its first new line since 2010. It is to begin operation in 2025.
An investment of NT$100 billion to NT$150 billion is likely needed to reach full capacity, Peng said.
To fund new capacity expansion in Kunshan, China, AUO raised its capital expenditure to NT$45 billion this year from NT$17 billion last year, he said.
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