Advantech, a leading manufacturer of industrial internet of things (IIoT) solutions, announced lower earnings per share (EPS) for the fourth quarter and full year of 2023, reflecting broader economic and geopolitical headwinds weighing on the tech sector. EPS was 2.67 yuan in the fourth quarter, representing declines of 11.29% quarter over quarter (Q/Q) and 18.24% year over year (Y/Y). Annual EPS was 12.65 yuan, a drop of 8.66% compared with the previous year. However, the company remains dedicated to its shareholders by recommending a sizable cash dividend of 9.5 yuan per share, pending authorization at this year’s regular shareholders’ meeting, which represents an attractive distribution rate of 75%.
Consolidated revenue for the fourth quarter was 15.138 billion yuan, down slightly both Q/Q and Y/Y, but the company was able to slightly raise its gross profit margin by effectively managing expenses in a difficult environment. Annual revenue was down 6% to 645.68 billion yuan, but thanks to a 1% Y/Y increase in net profit after tax, broke a new record as it reached 108.38 billion yuan.
Advantech reported varied market performance by region during the period, as only North Asia posted growth, while North America and Europe each declined, and drops in Taiwan, emerging regions and China were magnitudes greater due to reduced demand. Most of its diverse business groups also reported Y/Y declines, as nearly all of them felt the impact of high inflation and slowing demand, with only the Embedded-IoT Platform Business Group managing to hold steady.
CFO Chen Qingxi noted the many challenges the company faced in 2023, including high inflation and geopolitical unease, but said that its emphasis on operational efficiency and inventory control allowed it to maintain a stable profit structure despite a revenue decline, and that it was able to hit an all-time high in net profits even in such an environment. Looking ahead to 2024, the company remains “cautiously optimistic,” expecting demand across its markets to gradually recover as a result of new projects and strategic initiatives that could ultimately return it to growth momentum.
