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Wistron launches restructuring initiative to seek growth (update)

Wistron launches restructuring initiative to seek growth (update)

Taipei, June 26 (CNA)
Taiwan's Wistron Corp., one of the world's largest contract laptop makers, said Friday it had started an internal initiative to cut costs and reallocate its workforce in a move to turn its business around. The initiative, launched earlier this year, is aimed at changing the ways of thinking and utilizing information that Wistron employees have applied to achieve their success in the past, said Wistron Chairman Simon Lin.
"We are considering to create a really competitive foundation for the next five to 10 years," Lin told a meeting with shareholders, adding that the initiative might take six to 12 months to bear fruit. On the company's core business outlook, Lin said he remains cautious about Wistron's notebook shipment growth in the second half of this year following "frozen" demand from customers in May, which he attributed to delayed buying before the launch of the Windows 10 operating system in July.
However, the customer demand had started to pick up this month, signaling a recovery in Wistron's notebook shipments during the second half of the year, he said.
Lin stressed that Wistron will continue its diversification efforts to the smartphone business, which is expected to boost the company's operations from the third quarter.
The 63-year-old chairman said Wistron had also launched a succession plan for internal candidates of the next chief executive officer, who is expected to share more responsibilities in the company in the following two to three years.
Wistron reported a net profit of NT$3.579 billion (US$113.5 million) for 2014 on consolidated revenue of NT$592.35 billion, which translated into nine-year-low earnings per share of NT$1.5.
The company's revenue declined around 5 percent due to the decreased shipment quantities of notebooks and smartphones. However, its net profit declined more significantly due to the considerable increase of 25 percent in manufacturing expenses compared with the previous year.
In March of this year, Lin told investors during an earnings conference call that the company expects to see an average of 20 percent in volume growth across all product categories in 2015, among which, smart devices will see the highest growth of 25 percent from last year's 15 million units, thanks to major contributions from the smartphone sector.
Wistron counts Hewlett-Packard Co., Dell Inc., Lenovo Group Ltd., Sony Corp. and Taiwan's Acer Inc. among its notebook customers, according to local media reports.
Notebooks account for the company's biggest revenue share at roughly 48 percent, followed by 19 percent from smart devices, 12 percent from desktop PCs, 6 percent from monitors, 6 percent from servers, 3 percent from televisions and 6 percent from other products, the reports said.
Wistron shares ended up 0.66 percent at NT$22.9 Friday on the Taiwan Stock Exchange. (By Jeffrey Wu)


Updated : 2021-09-24 17:25 GMT+08:00