Taipei, June 12 (CNA) A proposal by Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., to issue the company's highest cash dividend per share in its history was approved by its shareholders Tuesday.
At an annual general meeting, Largan's shareholders approved the company's plan to issue a cash dividend of NT$72.5 (US$2.43) per share on its 2017 earnings per share of NT$193.65.
That topped the cash dividend of NT$63.5 issued last year on its 2016 EPS of NT$169.47.
Shareholders were also pleased with Largan's earnings report for 2017, which showed a net profit of NT$25.98 billion, up 14 percent from a year earlier on consolidated sales that rose 10 percent year-on-year to NT$53.13 billion.
Based on its EPS in 2017, Largan's dividend payout ratio will be 37.4 percent, which was within the 35-40 percent range seen in the past five years.
Speaking at the meeting, Largan CEO Adam Lin (???) said his company will continue to focus on developing more sophisticated smartphone camera lenses and broadening its product mix to maintain its lead over its peers amid escalating global competition.
In 2017, Largan spent NT$3.28 billion on research and development, up 17 percent year-on-year, with an emphasis on smartphone camera lens development and the expansion of its R&D team, the company said.
The R&D spending accounted for about 6 percent of Largan's 2017 sales, it said.
Many investors are now watching to see whether Largan can maintain its earnings momentum.
Its sales were down in each of the first four months of 2018 from a year earlier because of weaker than expected demand for the iPhone X, but staged a comeback in May, when they were up 15 percent year-on-year at NT$4.32 billion.
Despite the May surge, Largan's consolidated sales in the first five months of 2018 were down 9 percent from a year earlier at NT$16.67 billion.
While Lin forecast at the meeting that Largan's sales in June would be little changed from May, he was more upbeat about July, saying orders placed for July delivery were strong as multi-lens cameras gain greater traction in the global smartphone market.
Lin said some clients have even placed orders with Largan for triple camera lenses for their smartphone production. Such lenses command higher profit margins and are likely to be featured more prominently in the market next year, he believed.
The company's capacity issues could hinder its growth, however.
Lin said Largan's production capacity is fully booked until July, and the company is now looking for a 30,000 to 40,000-ping (one ping equals 3.3 square meters) site for a new production facility that would be double the size of its main factory in Taichung.
Largan currently has a workforce of 7,400, including 1,000 in China, up from 7,000 at the end of last year, Lin said, adding that the company still lacks manpower and wants to hire more people.
Despite shareholder support for the cash dividend issue, shares of Largan fell 2.42 percent to close at NT$4,440.00 on the Taiwan Stock Exchange on Tuesday.
Source: Focus Taiwan News Channel