TAIPEI: Delta Electronics Inc, the nation’s biggest power supply unit maker, aims to grow revenue this year beyond last year’s record-breaking figure via mergers and acquisitions and growth in core businesses, a company executive said yesterday.
Delta’s revenue climbed 7 percent to all-time high of NT$203.5 billion (US$6.18 billion) last year from NT$190.6 billion in 2014 after acquiring Norwegian power system provider Eltek ASA for about NT$17 billion. The deal marked the largest acquisition launched by Delta over the past decade.
To pursue long-term growth, Delta is adopting two growth strategies, chairman Yancey Hai told investors.
Aside from expanding core business, “M&A is our favorite approach… We are looking at buying market shares, clients or technologies for long-term growth,” he said.
Hai said Delta is now in talks with several multinational companies for acquisition deals as a successful bid for Eltek has boosted the company’s confidence in buying more companies abroad.
The Taiwanese firm now expects its newly acquired Eltek to improve its gross margin to a double-digit percentage this year and next year from last year’s 7 percent, he said.
Delta chief executive officer Cheng Ping also told investors that the company’s goal is to grow further.
Cheng said that the energy management, power supply unit component and industrial automation businesses will be the main growth areas for this year.
However, at the conference the company declined to respond to a foreign investor’s question as to whether Delta would achieve 10 percent growth in revenue this year.
Rather, Hai said that business visibility remains vague due to the uncertainty over the global economy for the time being, while the company is going through a major transformation from a power unit component supplier into a total solution provider, he added.
That means rising expenses and higher research and development spending for new products, he said.
Last quarter, Delta’s net profit rose 3 percent to NT$5.16 billion, or NT$2.11 per share, compared with NT$5.03 billion, or NT$2.06 billion per share, during the same period in 2014, according to the company’s financial statement.
Operating expenses jumped 28 percent to NT$9.89 billion last quarter from NT$7.75 billion in the prior year. The figure represented 17.8 percent of the company’s total revenue of NT$55.7 billion in the final quarter of last year.
Goldman Sach analyst Willy Chen said in a client note yesterday that Delta’s net profit was slightly better than his forecast, while operating expense profits missed his estimate by 8 percent due to record-high operating expenses.
Chen maintained Goldman Sach’s “neutral” rating on Delta shares, which closed 1.06 percent lower at NT$140.5 on the Taiwan Stock Exchange yesterday.
The company’s board on Thursday approved the cash dividend distribution of NT$5 per common share, based on the company’s earnings per share of NT$7.67 last year.
That represents a payout ratio of 65 percent and 3.56 percent in dividend yield based on yesterday’s closing price.
