According to Epistar’s executive, the company expects a turnaround this quarter, thanks to strong demand for LED TVs and LED lighting would help boost factory utilization and lift gross margin significantly to more than 20 percent.
That would end two straight quarterly losses for Epistar, after the company lost NT$515 million (US$17.19 million) in the first quarter and NT$620 million in the final quarter of 2012.
Epistar said the prospects for next quarter have never looked better.
The company’s chairman Lee Biing-jye told Unique Satellite TV after the company’s annual shareholders’ meeting, “Capacity utilization is full now. Supply still lagged demand by between 20 and 30 percent. [Demand] looks quite good in July and August. [Demand in] September will depend on market demand for LED TVs.”
Additionally, Epistar also plans to build two new plants each in Miaoli County and China’s Fujian Province. And the plants would start operation in 2014, Lee told reporters.
Epistar shareholders approved a plan to sell 250 million common shares via a private placement in an effort to seek strategic partners and expand capacity in the next few years in anticipation of a boom in the LED lighting industry beginning in 2015.
Epistar eked out a profit of NT$480 million last year, with a gross margin of 12.31 percent, after the European debt crisis and wobbling US economy dampened LED TV demand and chip prices declined on oversupply, the company said in a report to shareholders.
Shareholders also gave the green light to a proposal to deliver a cash dividend of NT$1.1 per share based on last year’s net income and a special allocation of NT$492 million from its accumulated profits, compared with NT$4.5 per share Epistar delivered in 2011.