Yageo Corp (國巨), which makes passive components, on Tuesday reported that net profit for last quarter increased 80 percent from a year earlier and 10.1 percent from the previous quarter to NT$3.63 billion (US$125.91 million).
Earnings per share (EPS) were NT$7.37, the highest in the past seven quarters, the company said in a statement.
The strong earnings came after Yageo, the world’s No. 3 multilayer ceramic capacitor (MLCC) supplier, posted a revenue rise of 112.8 percent annually to NT$21.95 billion, the highest in eight quarters, while gross margin rose 6.4 percentage points to 37.4 percent and operating margin moved up 8.9 percentage points to 25.1 percent.
Photo: Chang Hui-wen, Taipei Times
Yageo attributed the strong third-quarter results to synergy with US-based Kemet Corp, a US$1.64 billion acquisition, as well as a gradual improvement in production and capacity utilization, and stable demand from end customers.
However, non-operating items posted a net loss of NT$675 million, including foreign exchange losses of NT$609 million due to the appreciation of the New Taiwan dollar against the US dollar.
The foreign exchange losses cut its earnings by NT$1.24 per share last quarter, hinting that it could make more money if there were no NT dollar appreciation, the company said.
In the first three quarters of this year, net profit expanded 55.5 percent year-on-year to NT$9.27 billion, or EPS of NT$20.03, while cumulative revenue grew 45.2 percent to NT$45.45 billion, the company said.
Gross margin and operating margin improved to 40.1 percent and 27.3 percent respectively, it said.
Yageo said that it remains confident it would achieve stable revenue and profitability growth.
“The multiple demands for customized high-end specialty products in coping with future technologies will eventually maximize the company’s value in high-end automotive, industrial, medical, aerospace, 5G and Internet of Things segments,” it said.
As the global COVID-19 pandemic has not eased and the uncertainty of international trade disputes remains high, Yageo has gradually increased capacity utilization for MLCCs and chip resistors, while running at full capacity for tantalum capacitors in a bid to meet steadily increasing market demand, it said.
A sales breakdown showed that MLCCs accounted for 27 percent of the company’s sales last quarter, followed by tantalum capacitors (24 percent) and chip resistors (17 percent), JPMorgan Securities Ltd said in a note on Tuesday.
Yageo’s revenue for this quarter is forecast to decline by less than 5 percent from last quarter thanks to seasonal demand, JPMorgan said, adding that tantalum capacitors would continue to drive the company’s sales momentum.
“Tantalum capacitors are seeing surging demand from the rollout of new generations of products by the graphics processing unit [GPU] vendors, plus the launch of new game consoles,” JPMorgan said.
“These new GPUs and game console processors utilize a lot more tantalum capacitors than the previous generations,” it said. “We expect the tantalum utilization rate to remain at a very high level in the fourth quarter.”
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