Financial News

2020/10/27

Coretronic Corporation Announces Third Quarter 2020 Results

Hsinchu, Taiwan – Coretronic Corporation (5371.TW) today announced its financial results for the third quarter of 2020. For the third quarter ended on Sept. 30, 2020, Coretronic posted consolidated sales revenue of NT$11,941 million, increase 12% QoQ but drop 8% YoY. Consolidated gross margin for the quarter was 17.6%, decrease by 0.9% as compared with 18.5% in the previous quarter and the same period last year, mainly affected by unfavorable exchange rates. Operating income was NT$354 million, an increase of 11% from NT$320 million in the previous quarter, but a decrease of 29% compared to the same period last year. Net income was NT$553 million, representing a 5% increase QoQ and a 15% up YoY. Net income attributable to equity holders of the parent company was NT$585 million, an increase of 6% from the NT$552 million in the previous quarter and 24% from the same period last year. The basic EPS* for the third quarter were NT$1.35.

For the first three quarters of 2020, Coretronic reported consolidated sales revenue of NT$30,945 million, drop 13% YoY, affected by COVID-19 outbreak. Consolidated gross margin was 17.4%, decreased by 0.6% compared with 18% in the first three quarters of 2019, mainly due to the decline in plant utilization rate in 1Q20 and affected by unfavorable exchange rates in 3Q20. Operating income totaled NT$484 million, drop 39% YoY. Net income was reported at NT$1,020 million, up 27% YoY. Net income attributable to equity holders of the parent company was NT$1,142 million, a significant increase of 50% over the same period last year. The basic EPS for the first three quarters of this year was NT$2.63, which was also an increase from NT$1.75 in the same period last year.

“The overall shipment of Energy Saving Business Group was 12.46 million units in 3Q20, up 2% QoQ. Due to the mass production of new large-size TV/PID models, ASP increased by 12% in the quarter, as a result the overall sales revenue in 3Q20 was NT$6,511 million, a sharp increase of 15% QoQ. For the first three quarters of 2020, the sales revenue amounted to NT$16,494 million and the shipment was 33.06 million units, drop 7% and up 7%, respectively.” said Ms. Sarah Lin, President of Coretronic. Looking forward to the fourth quarter of 2020, Sarah pointed out that overall operation in 4Q will be affected by the uncertainty of delivery from IC suppliers to LCD suppliers and the shortage of manpower. It is expected that TV/PID model shipments will decrease by 10-20% QoQ due to seasonal factors. Monitor and NB models are expected to keep similar shipment as previous quarter. Therefore, the overall shipment in the fourth quarter is expected to decrease slightly by a single digit. Sarah also update the progress of the Vietnamese subsidiary established in the Saigon Hi-Tech Park in Ho Chi Minh City, Vietnam, the production line is about to be completed and the customer will conduct an audit in November. It is expected to be officially operated by the end of November. In the initial stage, it will produce TV LCM models to meet customers need, and it is expected to make a positive contribution to the overall operation of Energy Saving products business next year.

“For 3Q20, the shipment of Visual Solutions products was 199K units, up 3% QoQ, while the sales revenue was NT$2,954 million, representing a 5% QoQ increase, mainly benefited from the increase in the shipment proportion of home entertainment, education tender models and embedded solutions. For the first three quarters of 2020, the shipment was 563K units and sales revenue was NT$7,868 million, drop 13% and 24% YoY respectively, mainly due to the impact of Covid-19 on the global economy. Looking forward to 4Q20, with the steady migration of product technology to SSI and 4K, and the continued growth of sales momentum in the consumer segment, the overall shipments of Visual Solutions products are expected to grow by around 10% in the fourth quarter.” said Mr. SY Chen, President of Coretronic. Regarding the development strategy of imaging products, SY explained that Visual Solutions products will continue to develop innovative display systems, including home cinema and entertainment solutions, embedded solutions, education/enterprise solutions, simulation and dome projection, etc., to expand all-round competitive advantages. “With a stronger product portfolio and the completion of projections solution offerings in various fields, and actively strengthen the layout of home entertainment consumer products, and adapt to changes in market demand affected by the COVID-19, Coretronic expects the opera tion of Visual Solutions products will grow steadily in 2021.” said SY Chen.

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