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Hon Hai unit reports profit jump for 2014

Hon Hai unit reports profit jump for 2014

Taipei, March 21 (CNA) FIH Mobile Ltd. (???), one of Taiwan-based Hon Hai Precision Industry Co. (??)'s subsidiaries, reported a jump in net profit for 2014 due to efforts to broaden its customer portfolio. In a statement posted on the Hong Kong Exchanges and Clearing, the company, in which Hon Hai holds about 70 percent stake, said that it posted US$169 million in net profit for 2014, up 118 percent from a year earlier. FIH, which operates a broad production base in China, churning out a lot of electronics gadgets, such as smartphones, for international brands recorded US$0.0224 in earnings per share (EPS), up from US$0.0104 a year earlier. In 2014, FIH recorded US$6.83 billion in sales, up 36.7 percent from a year earlier. The company said that customers from Asia accounted for 62.38 percent of its total revenue, buyers from the Americas represented 25.82 percent, and clients from Europe made up 11.8 percent. "The profit increment was mainly driven by gross margin expansion, principally as a result of greater orders from customers, yield and operation efficiency and effective cost control and resources optimization," FIH said in the statement. It added: "In the past two to three years, the Group had succeeded in both customer penetration and new client expansion which diversified the customer mix through strengthening existing relationships and building up new relationships, thereby giving rise to more orders from customers and ultimately earnings." The Hong Kong-listed company said that with more and more customers adopting metal casings, its gross margin has been on the rise. FIH said that since demand for Chinese brand electronics devices turned stronger, the company's sales in the Asian market rose significantly, serving as the driver to the year's revenue and profit growth. FIH said that it has proposed issuing NT$0.00544 in cash dividend for 2014 for each common share and US$0.01926 for each preferred share. Market analysts said that the significant growth in net profit enjoyed by FIH is expected to give a boost to parent Hon Hai's earnings for this year. Hon Hai has not reported its yearly results yet. On Friday, shares of Hon Hai gained 2.09 percent to close at NT$93.00 (US$2.95) on the Taiwan Stock Exchange. (By Jackson Chang and Frances Huang)