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Advantech Reports 1Q20 EPS of NT$1.85

4/29/2020

Advantech (ticker: 2395.TW) today announced the following consolidated financial results for the first quarter of 2020 ending March 31:

  • Revenue was NT$11.272 billion, down 8.4% YoY
  • Gross profit was NT$4.395 billion, down 7% YoY
  • Operating profit was NT$1.654 billion, down 10.7% YoY
  • Net income was NT$1.29 billion, down 19.7% YoY
  • Earnings per share was NT$1.85, down 20% YoY

Regarding the 1Q20 operating results in US dollar, Advantech achieved an overall revenue of US$375 million, in line with company projections. For the Embedded IoT (EIoT) and Applied Computing Group (ACG) business groups, performance was relatively stable, down 2% and 5% YoY, respectively. After February, the Industrial IoT Group (IIoT), Cloud IoT Group (CIoT, aka the Networks & Communications Group), and Service IoT Group (SIoT) felt the impact of component shortages and their 1Q20 revenues dropped 9%, 13%, and 12% YoY, respectively. However, the overall component supply chain is expected to improve by the middle of May.

In terms of a geographic overview, most markets have reported YoY revenue declines, in part due to the Kuanshan factory shutdown in February and logistics control afterwards. However, the Taiwan market reported a 32% YoY growth, contributing a healthy 8% of total revenue. In addition, revenue for the North America, Europe, and China markets dropped 5%, 10%, and 20%, respectively, contributing 30%, 18%, and 18% to total revenue in 1Q20. The North Asia markets (including Japan and South Korea) reported a 11% YoY revenue decline in 1Q20, representing 11% of total revenue.

Mr. Eric Chen, President of General Management at Advantech, stated that, “The impact of COVID-19 was felt across the board in 1Q20. Looking forward to 2Q20, we see a rebound from China and North America but no recovery signals yet from the European market. Although backlogs and bookings look resilient in 2Q20, we plan to focus more attention to the demand side in 2H20, because the nation-wide lockdowns will definitely impact enterprise spending going forward. Accordingly, we will invest more in online initiatives to maintain relevant market activities and communications with our customers. At the same time, we will also closely monitor customer payments and enhance our cash flow in order to prepare for a rebound in the near future, once the virus is under control.”