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Panel maker Innolux sees 24 percent increase in revenue

TAIPEI, Taiwan -- Display panel maker Innolux (群創) yesterday reported stellar performance over the second quarter, with sales seeing a 24-percent quarter-on-quarter improvement while garnering earnings-per-share performance of NT$0.33 over the period, vastly exceeding the NT$0.02 recorded in the first quarter.

In the second quarter the company saw sales rise to NT$111.1 billion, improving by 24 percent over the NT$89.6 billion recorded in the previous period. Over the period, the company's gross profit and operating profit reached NT$11.6 billion and NT$6.1 billion, respectively, with net income reaching NT$3 billion, up 1.8-fold quarter-on-quarter, the highest seen since the second quarter of last year.

The company noted that its net debt had improved as of the end of the second quarter, reducing by NT$34.8 billion to reach NT$148.9 billion. Concurrently, the company's net gearing ratio, a measurement of leverage utilization, improved from 76.7 percent to 64.3 percent.

Throughout the second quarter, the company's inventory was valued at about NT$45.7 billion, with days' sales of inventory rated at 44 days.

The company attributed the significant improvements seen over the second quarter to its decision to pull out from the low-margin and labor-intensive display panel bonding and assembly businesses, a transition that took a year in the making.

Q2 Shipments Up 24.8%

Innolux stated that about 7.98 million square meters of display panels were shipped over the second quarter, up by 24.8 percent quarter-on-quarter, while noting that a square meter value of display panels is valued at about US$459 per square meter. Small- to medium-sized panels saw the most dramatic improvement, growing 30 percent to reach 86.9 million units, generation NT$25.1 billion in sales.

The company added it is prepared to offer a full array of the latest 4K ultra high-resolution displays, available in variants ranging from 39 to 65 inches. Sales of 4K panels are expected to represent 20 percent of this year's overall sales, and help in improving profit margins.

Meanwhile, with global market share reaching 20.2 percent, Innolux in the second quarter had displaced Samsung to become the world's second largest LCD display maker of large-sized display panels, trailing after LG Display.

With the traditional third-quarter shopping high season fast approaching, a number of foreign institutional investors yesterday expressed an upbeat outlook on the display panel sector, expecting module prices to rise on account of anticipated orders as inventory levels dwindle briskly under surging demand.

Innolux shares yesterday reached their intraday high of NT$15.4, gaining NT$0.2 or 1.34 percent to close at NT$15.15, with trading volume expanding to more than 15.8 million shares.

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