Wistron Corp (緯創), one of Apple Inc’s iPhone assemblers, yesterday said it was upbeat regarding business this year, despite production being halted in India due to the COVID-19 pandemic.
“We are under a big threat of course, regarding the coronavirus outbreak, as we encountered a factory shutdown as well as material shortages from the supply chain [in China] … but we believe this is a short-term issue,” Wistron chairman Simon Lin (林憲銘) told investors at an earnings conference in Taipei.
He forecast a small annual increase in the company’s top line this year, as well as an increase in its profit margin.
The company has a strong foothold in market segments, such as PCs, server storage, smartphones and other smart devices, which are least expected to suffer under the wide-spread pandemic, Lin said.
“Even under a lockdown, we still need [these] tools to stay connected … we will see a quick ramp-up in market demand” after the virus is contained, Lin said, predicting a rebound in sales by the third quarter of this year.
However, sales next quarter are expected to decline, as demand for desktops slips amid an economic slowdown, Lin said.
“We are now shifting our focus from consumer products toward commercial [enterprise] products, as they would be less affected” by market volatility, Lin said, adding that Wistron is prioritizing the production of commercial laptops due to growing demand.
Meanwhile, the company’s server business segment continues to bring in healthy sales as demand from enterprise clients remains robust, Lin said, adding that Wistron is planning to expand its server plant in Mexico within nine months.
Intent on expanding production beyond China, Wistron has nearly doubled capital expenditure from about US$265 million last year to US$550 million this year with another US$450 million to US$500 million planned for next year.
“This will be our biggest spending for 10 years to come,” Lin said, adding “[sales from] outside of China will contribute from 20 to 25 percent this year to about 50 percent next year,” as he pointed to the company’s Vietnam plant, which would produce PCs and monitors, set to open next year.
Wistron’s board of directors proposed to increase investments in India from US$36 million to US$76 million as it seeks further expansion.
The company’s Indian plants, which make older iPhone models, are shut down until April 14 due to New Delhi’s efforts to contain the spread of COVID-19.
Hon Hai Precision Industry Co (鴻海), which also manufactures iPhones in India, has similarly shut down operations in the country for the next three weeks.
Wistron on Tuesday posted a 38.56 percent surge in net profit to NT$6.8 billion (US$224.24 million) for last year, translating into earnings per share of NT$2.4.
Its board has proposed distributing a cash dividend of NT$2 per common share, for a payout ratio of 83.33 percent.
Wistron yesterday launched a share buyback plan to buy up to 60 million shares until May 24.
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