Held back by Euro crisis, Delta Electronics forecasts flat revenue growth this year
Delta Electronics (Thailand) has lowered its expectations for revenue to flat growth mainly because of the impact of the euro-zone crisis and global economic uncertainty, said its president Henry Shieh.
Previously, Delta projected revenue would grow by 10 per cent, but sales in the first six months increased only slightly to Bt19.07 billion from Bt19.06 billion in the same period last year.
“The European situation has had a major impact on solar products, so sales revenue for the entire year might not surpass last year’s figure of Bt38.40 billion,” he said.
The company yesterday reported a consolidated net profit of Bt899.16 million for the second quarter, down from Bt911.67 million in the same quarter last year.
Shieh said that if the global economy does not improve by next year, Delta’s revenue might not even match this year’s performance.
Delta needs to cut its investment budget this year to cope with the situation, he said, to US$15 million (Bt470 million) from $25 million. As part of that reduction, it has delayed investing in a new plant in India because of lower sales in that country in the past few years.
The company might resume its investment plan in India after the general election set for 2014 or wait for the appropriate time.
Bualuang Securities noted that Delta’s net profit was 4 per cent higher than the securities house had estimated and 10 per cent above the Bloomberg consensus, based on lower-than-expected sales, general and administrative expenses and a bigger foreign-exchange gain than modelled. Stripping out the Bt63 million forex gain, core profit would be Bt835 million, close to Bualuang’s estimate of Bt840 million.
The house has raised the full-|year earnings forecast by 3 per cent to reflect greater-than-expected interest income and forex gains. |The first six months’ earnings represent 50 per cent of Bualuang’s |full-year forecast and the Bloomberg consensus.
