Delta Electronics Inc (台達電) yesterday reported a record profit last quarter, thanks to catalysts such as contributions from a newly acquired power system company and improved sales at its power management unit.
However, the nation’s top power supply maker did not offer sales guidance for this quarter, citing a law banning financial forecasts before the completion of fundraising at the end of the year.
Net income climbed to NT$5.89 billion (US$180.2 million) in the third quarter, up 1 percent year-on-year and 55 percent quarter-on-quarter, mainly due to sales contribution from newly bought Eltek ASA and that from its power management segment.
Earnings per share were NT$2.42, compared with NT$2.4 per share in the same period last year and NT$1.55 per share in the prior quarter.
“Eltek benefited Delta’s sales and gross margin performance last quarter,” Delta investor services division manager Rodney Liu (劉致遠) told an investors’ conference in Taipei.
Gross margin was 28.2 percent last quarter, up 0.9 percentage points from last year’s 27.3 percent and 1.2 percentage points from the previous quarter’s 27 percent. It was the highest quarterly gross margin in the firm’s history.
Delta in December last year announced it was to acquire Eltek in a deal totaling US$530 million.
“So far, the acquisition seems to be a good deal,” Delta chairman Yancey Hai (海英俊) said.
As the two companies have different client bases, Delta now has a larger client base and can expand its market, Hai said, adding that Eltek’s sales and profit have remained stable over the past few months.
KGI Securities Investment Advisory (凱基投顧) on Oct. 6 forecast Delta’s sales this quarter might grow 7 percent to NT$57.5 billion from last quarter’s NT$55.9 billion, driven by strong demand for passive components and thermal electric cooing fan products.
The company is also making efforts to improve its financial health after announcing last month its first rights issue in the company’s 45-year history. Delta plans to issue 170.66 million new shares, hoping to raise more than NT$25 billion.
“The move could dilute earnings per share by 7 percent at most, but we can handle it,” Hai said.
Delta’s spokesman Jesse Chou (周志宏) said Delta’s long-term and short-term debt totaled more than NT$40 billion. The firm plans to spend most of the newly raised funds to reduce debt, he said.
The company’s debt ratio is 56 percent and Delta hopes to lower the ratio to about 50 percent.
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