Financial News


Coretronic Corporation Announces First Quarter 2020 Results

Hsinchu, Taiwan – Coretronic Corporation (5371.TW) today announced its financial results for the first quarter of 2020. For the first quarter ended March 31, 2020, Coretronic posted consolidated sales revenue of NT$8,369 million, decrease 36% QoQ and drop 26% YoY, resulting from traditional slow season and the impact of COVID-19 outbreak. Consolidated gross margin for the quarter was 15.8%, a decrease of 2.4% as compared with 18.2% in the previous quarter and drop by 0.5% over the same period last year, mainly due to the decline in plant utilization rate and the increase in idle costs caused by the outbreak of coronavirus. Operating loss was NT$189 million, net loss was NT$58 million. Net income attributable to equity holders of the parent company was NT$5 million, decrease 99% QoQ and drop 95% YoY, respectively. The basic EPS* for the first quarter were NT$0.01.

“The overall shipment of Energy Saving Business Group was 8.41 million units in 1Q20, representing 22% QoQ decrease & 16% drop YoY, and the overall sales revenue was NT$4,300 million, drop 31% QoQ and decrease 21% YoY, affected by coronavirus.” said Ms. Sarah Lin, President of Coretronic. “The production capacity and supply chain are gradually stabilizing currently, it is expected that the overall shipment in the second quarter of 2020 with 20% QoQ growth under the rebound of NB model shipments.” Look into the future operational development, Sarah indicate that affected by COVID-19, the TFT panel makers has accelerated its exit, or delayed its expansion and entered the consolidation phase, and the industry supply and demand sector will gradually shift. Coretronic will establish a new operating base in line with customer needs. With intelligent manufacturing to consolidate economies of scale and grasping key components and maintain new technology leadership as core strategies to facing market competition, we will continue to expand the customer base of China and other system applications customers while maintain the flexibility of business models and strategic cooperation to pursue higher profits and value.

“For 1Q20, the shipment of Visual Solutions products was 169K units, with 17% YoY decrease, while the sales revenue was NT$2,102 million, representing an 36% YoY drop, due to the COVID-19 caused delays in production capacity, supply chain and customer resumption. For 2Q20, resulting from the new coronavirus outbreak and the cancellation of global sports events, sales will slow, but due to the relatively low base period of the first quarter, the overall shipment of Visual Solutions products in the second quarter is expected to grow by about 20%.” said Mr. SY Chen, President of Coretronic. SY further explained that, according to current observations, the sales momentum of home entertainment and education models has maintained, the shipment of SSI models has grown steadily, and the demand for large venues and commercial models has been disrupted by the severe epidemic situation and the lockdown, expected to recovery in the fourth quarter of this year. Looking to the future, SY pointed out that despite the COVID-19 has cause economic recession, Visual Solutions product team will focus on the high-end product segment with potential and actively enhance competitive advantage to maintain the leading position. At the same time, will continue to use new technologies to explore new application gaps in the market to meet the needs of more diverse visual solutions products in different scenarios and industries, and gradually increase the operating growth momentum.

Looking into 2020 development strategy, facing the severe epidemic situation and the global economy falling into recession, the management team will build a stronger consensus among employees to consolidate the operations of the two existing business groups through teamwork, proactive innovation and professional management, and implement medium- and long-term strategies. Coretronic will move forward to the advanced technologies area such as "image recognition, AI and cloud premium service" and aim to enhance the overall operating performance and expand new growth momentum of Coretronic Group.

* Basic EPS was calculated based on the total weighted average outstanding shares of the balance sheet dated (434m shares).