Electronic payment terminal maker Castles Technology Co (虹堡科技) yesterday said that it is targeting a double-digit percentage revenue growth next year, supported by new large-scale replacement demand for its mobile point-of-sale (POS) devices following a system renewal trend.
Revenue growth is expected to be driven by a shift from Linux, which has long dominated POS operating systems, to the more flexible Android platform, Castles Technology Co chairman Kevin Hsin (辛華熙) told an earnings conference.
The transition is expected to give a further boost to the company’s sales of Android-based payment terminals, integrated POS (iPOS) platforms and large-format all-in-one devices, which target applications in retail, catering and integrated counter-service settings, Hsin said.
Photo: Meryl Kao, Taipei Times
Products equipped with Android systems now account for more than 80 percent of its total sales, while those with Linux represent about 20 percent, he said.
As the Payment Card Industry Security Standards Council pushes a shift from the PCI 5.0 standard to versions 6.0 and 7.0, the company plans to roll out PCI 6.0 and 7.0-compliant Android terminals across its product lines to meet market demand, he added.
Next year’s performance would also be supported by major financial-sector clients, whose front-loaded orders for next year would be higher than this year, Hsin said.
Several bids are entering the final decision stage, including tenders from a major French bank and a major US financial institution, with Castles and one other competitor shortlisted for both, he said.
If the company wins the contracts, mass shipments could begin as early as the third quarter next year and provide a stable long-term revenue contribution, he added.
Overall, the US and European markets are likely to outperform other regions next year with better revenue growth, as the company has secured orders from major financial and channel clients in France, the UK, and northern and southern Europe.
Castles’ revenue in the first three quarters dropped 2 percent annually to NT$5.55 billion (US$176.7 million) as sales in the Asia-Pacific market declined, but was partly offset by high-margin products shipped to the US and European clients, the company said.
By region, Europe accounted for 52 percent of its total revenue during the nine-month period, followed by the US at 31 percent and the Asia-Pacific region at 17 percent, it said.
Demand in the Asian market has been weaker than expected this year, as shipments of some products have been postponed to the first quarter next year from this quarter, due to delays in government bidding, Hsin said.
Castles’ net profit fell 62.74 percent to NT$193.46 million in the first three quarters, from NT$519.2 million a year earlier. Earnings per share plummeted to NT$1.56 from NT$4.59.
Gross margin rose to 34.77 percent in the first three quarters, from 32.86 percent in the same period last year.
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