Yageo announces 60% profit decline in 2011

Yageo, a supplier of multi-layer ceramic capacitors (MLCCs) and chip resistors, has announced net profits for 2011 declined 59.8% with revenues down 8.6% from a year ago. The passive component maker is taking a conservative outlook for 2012.

Yageo indicated that it tends to adopt a cautious attitude toward this year as the visibility of orders remains below one month. Limited order visibility shows that real end-market demand has not yet returned, the company said, adding that it is still in a wait-and-see mode.

Yageo reported net profits of NT$117 million (US$4 million) on revenues of NT$5.37 billion for the fourth quarter of 2011. The sales and profit figures represented sequential decreases of 13.9% and 72.7%, respectively. Gross margin for the quarter also dropped sequentially, by 4.8pp, affected by falling sales as well as rising raw material costs and the impact of currency fluctuations, Yageo said.

Yageo's revenues and net profits for all of 2011 were NT$24.97 billion and NT$1.67 billion, respectively, down 8.6% and 59.8%. Gross margin for the year slid to 21.3% from 28.28% in 2010.

Yageo revealed that sales of MLCC products accounted for 41-42% of company revenues in 2011, followed by chip resistors with 35%. The company also makes magnetic components and high-frequency antennas, with sales contributing the remaining 23-24% of its total sales last year.

Yageo remains focused to PC, wireless and consumer electronics applications, with the former one accounting for 30-35% of company revenues in 2011 followed by the latter two contributing a combined 20-25%. Yageo added it is looking to develop solutions targeted at industrial and car electronics seen as the new growth drivers for the company in the future.

March 12, 2012

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