Taipei--Quanta Computer Inc. (??), the world's largest contract notebook computer maker, suffered a steep decline in net profit in the first quarter of this year as the manufacturer felt the impact from a stronger Taiwan dollar.
During the January-March period, Quanta posted NT$2.79 billion (US$92.38 million) in net profit, down 22.8 percent from a year earlier and also down 31.3 percent from a quarter earlier, after incurring NT$649 million in foreign exchange losses.
The first quarter net profit was the lowest it's seen in 25 consecutive quarters.
As a result, its earnings per share for the first quarter stood at NT$0.72, down from NT$0.94 seen over the same period last year and NT$1.05 recorded a quarter earlier.
Quanta is one of many exports-oriented high-tech firms in Taiwan which have reported foreign exchange losses in the first quarter, when the New Taiwan dollar appreciated about 6 percent against the U.S. dollar due to massive foreign fund inflows.
Other high-tech firms which faced a similar fate from non-operating losses included Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the world's largest contract microchip maker, which reported about NT$6 billion in foreign exchange losses, while PC brand Acer Inc. reported NT$522 million in losses.
Altogether, Quanta posted NT$734 million in total non-operating losses in the first quarter, while its operating profit stood at NT$4.68 billion, up 33.1 percent from a year earlier, but down 14.8 percent from a quarter earlier.
Quanta said that the year-on-year improvement in operating income reflected an increase in orders for the Macbook Pro notebook computer model from Apple Inc. Rising Macbook Pro shipments to Apple also boosted Quanta's first quarter consolidated sales by 15.5 percent from a year earlier to NT$227.92 billion.
The sequential drop in the first quarter operating losses largely reflected slow season effects in the global PC industry.
Quanta Vice Chairman C.C. Leung (???) said that the notebook computer sales for the second quarter could rise 10 percent from the first quarter.
Leung said that PC sales momentum could continue to pick up in the second half of the year, adding that Quanta's notebook computer shipments for that period are expected to account for more than 50 percent of its total in 2017.
To meet rising demand in the second half of this year, Quanta announced plans to invest US$100 million to expand its plant in Chongqing, China. Market analysts said that the production capacity expansion aims to provide additional services to Apple.
Quanta added that its board also proposed issuing NT$3.9 in cash dividend per share to shareholders this year based on the 2016 EPS of NT$3.93 so that the dividend payout ratio will hit 89 percent, up from 82 percent for 2015.
Barry Lam (???), chairman of Quanta, is expected to receive NT$1.46 billion in cash dividends if his company's shareholders approve the dividend proposal in an annual general meeting in June.
Lam would then receive the second largest amount in cash dividends of any single shareholder of a company listed in Taiwan. He will trail only Chairman Terry Gou (?? ?) of Hon Hai Precision Industry Co. (??), who is expected to receive about NT$7.3 billion in cash dividends from his own company this year. item/cs
Source: Focus Taiwan News Channel