Smartphone camera lens maker Largan Precision Co (大立光) yesterday posted its highest net profit since the fourth quarter of 2020, attributing the figure to nonoperating gains, but gross margin continued to slide, falling to the lowest in eight years.
The Taichung-based firm made a net profit of NT$5.51 billion (US$190 million) in the first quarter of this year, up 7.34 percent from a quarter earlier. On a year-on-year basis, profit was up 3.71 percent.
Nonoperating gains contributed NT$2.75 billion, including foreign exchange gains of NT$2.38 billion, Largan said.
Photo: David Chang, EPA-EFE
Earnings per share were NT$41.3, compared with NT$38.37 in the previous quarter, marking the highest in the past five quarters.
However, gross margin fell to 53.36 percent from 55.85 percent in the fourth quarter of last year, compared with 64.77 percent a year earlier.
Last quarter’s gross margin was the lowest since the fourth quarter of 2014, when it was 50.61 percent, company data showed.
Revenue declined to NT$10.13 billion in the first quarter due to a seasonal slowdown, down 22 percent quarterly and 14 percent annually, the company said.
Largan chief executive officer Adam Lin (林恩平) told an online conference that seasonal factors continued to weigh on the company’s business, and revenue for this month and next month would not be higher than last month’s.
Affected by lockdowns in cities in China posting surging COVID-19 case numbers and tight supply for some components, bottlenecks persist in the company’s supply chain, Lin said.
This quarter, Largan’s capacity utilization and product mix would be similar to last quarter, he said, adding that shipments are expected to peak in the second half of the year.
The company — whose customers include Apple Inc, Sony Corp, Samsung Electronics Inc and Huawei Technologies Co (華為) — would continue to focus on high-end lenses for premium smartphones this year, instead of mid-range and low-end lenses increasingly favored by many handset vendors, he said.
Despite slowing specification upgrades in smartphones in the past few months, Lin said that the number of models featuring 8P lens modules is increasing.
An 8P lens contains eight thin layers and is more advanced than lenses with fewer layers.
However, demand for 8P lenses would mainly depend on clients’ production schedules and market conditions, he said.
As for other products, Lin said the company plans to start shipping some lenses for virtual reality devices by the end of this year at an initially small volume, while it would continue to expand its business of automotive lenses.
Largan is constructing new manufacturing facilities in Taichung, with one new plant to be launched in the second quarter of next year, Lin said.
The new plant would start to make revenue contribution as early as in the second half of that year, he said.
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