Yageo forecasts stronger second half

Taipei, Aug. 15, 2003 (CENS)--Yageo Corp., a leading Taiwanese supplier of passive electronic components, recently forecast its shipment of monolithic ceramic chip capacitors (MLCCs) to rise 15% and shipment of chip resistors to increase 12% this quarter over last quarter.

The company also forecast that the unit price for MLCCs will dip around 5% and the price of resistors will slip 3% to 5% in the same comparison period.

Yageo president Remko Rosman released the forecast on Aug. 13 at an investor conference in Taipei.

The Yageo chief executive noted that his company has been losing money since last year because of poor performance in its non-core business investments. However, the company pared its losses to NT$250 million (US$7.3 million at US$1:NT$34) last quarter, a 54.5% improvement from the quarter earlier. Meanwhile, the company's quarterly post-tax net loss shrank 44.3% last quarter to NT$375 million (US$11 million) from the first quarter.

The company posted an after-tax loss of NT$1.05 billion (US$30 million), or NT$0.47 loss per share, in the first half. However, Rosman forecast that his company would post a profit in the second half.

Yageo said that it has steadily reduced production costs to offset falling unit prices and boost profits. The company's net margin is estimated to rise to 24% to 27% this quarter, compared with 20.5% in the first quarter and 23.8% in the second quarter.

Yageo vice president Y.C. Yang emphasized that his company has determined to continue to scale back its non-core business investments. It has reduced its stake in Sampo Corp. to 11% from 17% before. Yageo plans to sell all of its shares in Sampo by the end of next year.

Rosman said that his company's passive electronics component business began recovering last month, boosted particularly by growing demand in the notebook computer and motherboard markets.

Sales to mainland China accounted for 29% of Yageo's total revenue last month. Yageo is moving some of its front-end production lines in the Netherlands to the mainland and plans to move three to four lines to the mainland by the end of this year. Its first mainland facility will come on line next month.

Rosman noted that Yageo's acquisition of Royal Philips Electronics' MLCC units Phycomp Holding B.V. and Ferroxcube International B.V. in 2000 has given the company access to new capacity, technology and expertise.

With the two former Royal Philips Electronics assets, Yageo emerged in 2001 as the world's fifth-largest capacitor and resistor supplier.