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Taiwan Chi Mei Optoelectronics June quarter profit at record high
TAIPEI (AFP) Aug 05, 2004
Taiwan's second largest flat panel maker Chi Mei Optoelectronics Corp said its June quarter net profit reached a record high of 9.01 billion Taiwan dollars (265 million US dollars) as shipments grew sharply on surging global demand.

The company, which also ranked fourth in the world TFT LCD (thin-film-transistor liquid crystal display) industry, however warned of looming price cuts in the months ahead.

In the three months to June last year the firm recorded net profit of 8.32 billion dollars.

For the first six months, earnings rocketed with net profit of 17.34 billion dollars up from 100.73 million a year ago as there was a sharp ramp up in global demand for flat panels.

The company also benefitted from the launch of a new plant that makes large-size panels used in flat TVs.

Sales in the June quarter hit 30.31 billion dollars, up from 24.71 billion in the first quarter and 12.52 billion a year ago. For the half, sales more than doubled to 55.02 billion billion from 24.01 billion a year ago while earnings per share rose to 5.21 from 0.04.

Despite the glowing results the company warned that the growth momentum for the industry was expected to slow in the latter part of the year with the average selling price for flat panels in the third quarter seen declining by 15 to 20 percent from the previous three months.

"Many are talking about a possible decline of 15-20 percent in panel prices in the current quarter," Chi Mei Vice President Hsu Chun-hwa told an investors conference. "I think that range is reasonable.

"However, I have to acknowledge that, like our industry peers, we are also probing in the dark. We dare not say for sure."

Chi Mei Financial Director Eddie Chen said that while price cuts by the company and other flat-panel makers should boost demand towards the end of the third quarter, there is no way to guarantee it.

"All we can say is that we are optimistic with a note of caution," he said.

Chi Mei is expected to reduce its planned panel output for the third quarter by around 10 to 15 percent from its previous forecast, another vice president Wu Bing-seng said.

Despite weaker-than-expected demand for LCD screens, Hsu said Chi Mei has decided to maintain its earlier target to ship two million panels for LCD TVs in 2004.

Hsu said it is a fair estimate that global demand for LCD TV panels in 2004 should top 8-10 million units, but 12 million may prove a bit hard to achieve.

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