Delta Electronics (Thailand) Plc, the biggest electronics firm on the Stock Exchange of Thailand, has trimmed this year’s sales revenue forecast and capital expenditure, with the possibility that revenue will be flat next year due to the global economic situation.
President Henry Shieh yesterday said Delta’s turnover this year may possibly be flat or only increase slightly from last year as the economies of the US, Europe and Japan are not in good shape while the Chinese economy is slowing down.
The company previously projected a 10% growth of revenue this year, to US$1.3 billion.
“The Indian market was pretty low in the first half, while China’s economy is still growing this year but not as much as before,” Mr Shieh told a briefing at the SET. “Earlier, we expected the solar inverter business would recover quickly. In fact, price erosion has continued due to fierce competition.”
For 2013, Delta anticipates revenue growth of no more than 10% or flat at $1.2 billion compared with normal annual growth of 10-20% in the past.
India will hold an election in early 2014, thus big spending and business recovery are not expected within the next year and a half, he added.
The company has also revised down its planned investment budget this year from $25 million to $15 million by postponing a new plant in India.
“Delta always monitors progress of the environment in Asia, Europe, Brazil and Russia for our investments. We will hold the capital and invest at the right timing,” said Mr Shieh.
Delta reported revenue of 19.1 billion baht in the first half, relatively flat year-on-year.
Net profit rose by 8.84% year-on-year to 1.6 billion baht from 1.47 billion.
Earnings edged down by 1.32% year-on-year in the second quarter to 899 million baht from 911 million a year earlier, but surged by 26% quarter-on-quarter.
Mr Shieh said Delta has to revisit its product and country strategies for the solar inverter business due to changing subsidy policies in Europe.
Australia has a good demand for the product while the company is looking at Italy, France and other Western Europe countries to boost sales.
DELTA shares closed yesterday on the SET at 23.80 baht, up 10 satang, in trade worth 15.2 million baht.
News from the Bangkok Post