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Innolux Reports Q4 Loss Amid Market Challenges, Eyes Recovery in 2024

With a focus on product diversification and market demand, Innolux anticipates a rebound driven by global events and tech advancements
Taiwan
i 3481.TW Mid and Small Cap 2000 Tech 350
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Innolux Corporation (3481 TT) today announced its financial results for the fourth quarter of 2023, reporting a consolidated revenue of NT$53.4 billion, with an after-tax net loss of NT$3.2 billion, which represented a basic loss per share of NT$0.36. Despite the challenges faced throughout the year, Innolux employed its strategic measures such as adjusting its product mix and deployment changes to help navigate the impacts, resulting in a 62.1% improvement over the previous annual gross loss to a gross profit margin of 5.6%, which was a 4.6 percentage point increase from 2022.

Revenue distribution by product application exhibited a diverse portfolio of revenues, wherein TV products accounted for 35%, desktop monitor, notebook and tablets & other portable computers products made up 18%, automotive products represented 27% and mobile phone and commercial applications and others together made 20% of total revenue. Key to maneuvering 2023’s conservative consumer market demand was Innolux’s production capacity control to balance supply and demand, as well as optimization of its product mix.

Consolidated revenues for Innolux in 2023 totaled NT$211.7 billion, with an operating net loss of NT$18.7 billion, an after-tax net loss of NT$18.6 billion, and a basic loss per share NT$2.01.However, the shipment area decreased 7.8% QoQ and the selling price of LCD panels was US$269 per square meter.Looking ahead to 2024, Innolux believes that a moderate recovery will take place in the global economy, particularly with the Olympics and European Cup set to replace phones, the model of larger TV panels continues, and AI functions are integrated into more mobile phones and laptops.Moreover, Innolux has vision to the development of non-display application areas, such as automotive, medical, and semiconductor, to mitigate the risks of being a single display-area manufacturer and to create more value for shareholders, as this diversification of product offerings would likely lead to more resilient earnings and more confident investment in the company compared to only being a display maker.

Innolux expects a single-digit percentage decrease in large-size panel shipments quarter-over-quarter for the first quarter of 2024, as well as a low-single-digit percentage increase in the mixed average selling prices. Small to medium-size panel shipments are anticipated to decrease by a single-digit percentage quarter-over-quarter for the fiscal period.

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