Hon Hai most profitable PC maker in Taiwan in first half

Taipei, Sept. 1, 2004 (CENS)--Hon Hai Precision Ind. Co. Ltd., the largest private manufacturer in Taiwan, recorded the most-lucrative operation results for the second quarter among all local personal computer (PC) makers, with its gross margin rate rising to 7.04% in the first six months from 6.38% in the first quarter amid an almost across-the-board drop in such rate posted by local counterparts.

Hon Hai raked in earnings of NT$8.68 billion (US$254.6 million at US$1: NT$34.1) in the second quarter of the year, up 32% from the first quarter. The firm's aggregate earnings for the first half of the year came to NT$15.3 billion (US$448.68 million), up 22% from the same period of last year, translating into NT$4.1 (US$0.12) in after-tax earnings per share. All these figures made Hon Hai most profitable information technology (IT) conglomerate among all counterparts in Taiwan. The firm is currently the world's largest maker of barebone PCs, connectors, game consoles, and probably motherboards.

Hon Hai had reported total revenues of NT$174.3 billion (US$5.11 billion), pretax earnings of NT$15.25 billion (US$447.21 million), net earnings of NT$13.25 billion (US$388.48 million), and pretax earnings per share (EPS) of NT$4.7 (US$0.14) in the first half of the year. The lucrative figures contrasted sharply with the rumored deterioration of Hon Hai's profitability and demonstrated the upgrading of the firm's earning ability after its merger with Ambit Microsystems Corp., a thin-film electronics maker.

After the merger, Hon Hai's July revenue hit a new monthly high of NT$33.02 billion (US$968.33 million). Hon Hai also plans to spin off its cell-phone business division by the end of the year by setting up a holding company, which is scheduled to go public in Hong Kong. The scheduled new spin-off is expected to have revenue of over NT$100 billion (US$2.94 billion) this year, making it the largest cell-phone contract producer in Taiwan.

Hon Hai Group's chairman Terry Gou said that the holding company is also expected to become his group's future platform for overseas investment and acquisition projects.