Yaego Corp (國巨), the world’s No. 3 multilayer ceramic capacitor (MLCC) supplier, yesterday reported its weakest quarterly net profit in about four years, affected by sagging customer demand due to inventory correction and seasonal weakness.
Net profit last quarter sank 22.83 percent year-on-year to NT$3.65 billion (US$111.21 million) compared with NT$4.73 billion in the same period last year, hitting the lowest level since the third quarter of 2020.
On a sequential basis, net profit plummeted 35.4 percent from NT$5.65 billion in the third quarter last year.
Photo: Chang Hui-wen, Taipei Times
Earnings per share dropped to NT$7.1 from NT$9.43 a year earlier and NT$11.01 a quarter earlier.
Last year as a whole, Yageo still grew its net profit by about 11 percent to NT$19.36 billion from NT$17.43 billion in 2023. EPS rose to NT$38.18 from NT$37.74 in the prior year.
“This is probably the first time in the MLCC market’s history that we had back-to-back declining years. This is not something we or the industry was expecting,” Yageo executive vice president of global sales and marketing Claudio Lollini told a virtual investors’ conference.
However, the MLCC industry is “showing signs of improvement,” Lollini said. “And we can see that in our own book-to-bill [ratio]... Most of our products have positive book-to-bill [ratios], so we think the MLCC cycle is, hopefully, no longer on decline. I think we are beyond that. We’ll see some growth, but perhaps not very strong growth.”
Visibility on inventory levels from direct automotive and industrial customers is likely to remain low through this summer, he said.
Revenue this quarter would be little changed from the NT$30 billion made in the fourth quarter, the company said.
“Because of the Lunar New Year holiday, the first quarter is usually a low season, but we should be able to maintain the revenue [momentum] this time. Revenue would be flattish,” Yageo chief executive officer David Wang (王淡如) said.
“Our book-to-bill ratio now is higher than one. So, this is very, very positive,” Wang said. “Our distribution and channel inventory level is also very, very healthy, which is also very encouraging.”
Gross margin is expected to improve between 1.5 and 3 percentage points this quarter, from 33.2 percent last quarter, Wang said.
He attributed the improvement to increasing demand for artificial intelligence-related applications, computers, servers and consumer electronics from Asia, China, in particular.
Factory utilization is expected to drop to 70 percent for premium products and to 60 percent for standard products, from 75 percent and 65 percent last quarter, due to the long holiday, Wang said.
Factory utilization would improve quarter by quarter this year, he added.
Yageo said the US’ plan to hike tariffs is really a challenging issue as it is still evolving.
“However, largely speaking, I think we have good exposure in China, Mexico and Europe. And I think there is a decent split of our operations across different areas. So we’ll try to leverage that existence and try to make the best use of it,” Yageo chief financial officer Eddie Chen (陳彥松) said.
Yageo is not in a rush to adjust its global capacity before it gets a clear picture of the market situation, Chen said.
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