Contract electronics manufacturer Inventec Corp (英業達) yesterday posted its best profit in nine quarters as its gross margin continued to increase, despite a decline in revenue.
The company, which produces notebook computers, servers and smart devices for brand clients, reported a net profit of NT$1.99 billion (US$63.35 million) in the fourth quarter of last year, up 6.08 percent from the previous quarter.
Year-on-year, profit was up 42.64 percent, Inventec said in a regulatory filing.
Photo: Fang Wei-chieh, Taipei Times
While revenue in the October-to-December quarter fell 6 percent quarterly and 5 percent annually to NT$128.07 billion, gross margin improved to 5.7 percent, the highest since the first quarter of 2016 when it was 5.92 percent, company data showed.
Inventec attributed the increase in gross margin to an improved product mix — a higher contribution from artificial intelligence (AI) servers and lower shipments of notebook computers — and clients’ nonrecurring engineering fees, which refer to one-time gains from designing, developing and testing new products.
Earnings per share (EPS) were NT$0.55 last quarter, the highest since the third quarter of 2021 when the company made NT$0.78 per share.
Overall, Inventec reported total net profit of NT$6.13 billion last year, up 0.03 percent from 2022, or EPS of NT$1.71, on par with the previous year.
Full-year revenue decreased 5 percent to NT$514.75 billion, but gross margin rose 0.3 percentage points to 5.1 percent, the highest in six years, the company said.
The company’s board of directors has proposed distributing a cash dividend of NT$1.5 per share, Inventec said in a separate filing with the Taiwan Stock Exchange.
If approved by shareholders on June 12, the planned cash dividend, would represent a payout ratio of 87.7 percent.
Based on the company’s closing share price of NT$55.6 yesterday, it would translate into a dividend yield of 2.7 percent.
Inventec expects notebook computer shipments this quarter to be flat or slightly down from last quarter, the company said, adding that shipments next quarter would likely decrease by a high single-digit percentage due to shipment delays on some commercial models.
The company also expects server shipments to grow every quarter this year, with annual server revenue forecast to register double-digit percentage growth from last year, although analysts have said that the new US chip export controls for China might cap Inventec’s AI server sales.
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