Largan profit up 7.34% as gross margin shrinks
By Chen Cheng-hui / Staff Reporter
Smartphone camera lens maker Largan Precision Co (大立光) posted its highest net profit since the fourth quarter of 2020 yesterday, attributing the figure to non-operating gains, but gross margin continued to decline , falling to the lowest in eight years.
The Taichung-based company posted a net profit of NT$5.51 billion ($190 million) in the first quarter of this year, up 7.34 percent from the previous quarter. On an annual basis, profit increased by 3.71%.
Non-operating gains contributed NT$2.75 billion, including foreign exchange gains of NT$2.38 billion, Largan said.
Photo: David Chang, EPA-EFE
Earnings per share were NT$41.3, compared to NT$38.37 in the previous quarter, marking the highest of the last five quarters.
However, gross margin fell to 53.36% from 55.85% in the fourth quarter of last year, from 64.77% a year earlier.
Gross margin in the latest quarter was the lowest since the fourth quarter of 2014, when it was 50.61%, according to company data.
Revenue fell to NT$10.13 billion in the first quarter due to a seasonal slowdown, down 22% quarterly and 14% annually, the company said.
Largan CEO Adam Lin (林恩平) told an online conference that seasonal factors continue to weigh on the company’s business and revenue for this month and next month will not be higher than those from last month.
Affected by lockdowns in Chinese cities showing rising numbers of COVID-19 cases and tight supplies for some components, bottlenecks persist in the company’s supply chain, Lin said.
This quarter, Largan’s capacity utilization and product mix would be similar to last quarter, he said, adding that shipments are expected to peak in the second half.
The company – whose customers include Apple Inc, Sony Corp, Samsung Electronics Inc and Huawei Technologies Co (華為) – would continue to focus on high-end lenses for high-end smartphones this year, instead of mid-range lenses. and low-end increasingly popular. by many handset vendors, he said.
Despite the slowdown in smartphone specification upgrades in recent months, Lin said the number of models with 8P lens modules is increasing.
An 8P lens contains eight thin layers and is more advanced than lenses with fewer layers.
However, demand for 8P lenses will mainly depend on customer production schedules and market conditions, he said.
As for other products, Lin said the company plans to start shipping lenses for virtual reality devices by the end of this year at an initially low volume, while continuing to grow its camera business. automotive goals.
Largan is building new manufacturing facilities in Taichung, with a new plant to be launched in the second quarter of next year, Lin said.
The new plant would start contributing to revenue as early as the second half of that year, he said.
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