AUO net loss in 2019 sends share price down over 1.3%

Taipei AU Optronics Corp (AUO), one of the leading flat panel makers in Taiwan reported a net loss in 2019, the first since 2012, sending its share prices on the local main board down more than 1 percent Friday, dealers said.

The stock also faced downward pressure amid concerns over the spread of the the 2019 novel coronavirus (2019 nCoV) originally from Wuhan in China's Hubei province, which could impact the global economy, dealers added.

Shares in AUO fell 1.34 percent to close at NT$11.05 (US$0.37) with 135.76 million changing hand, underperforming the Taiwan Stock Exchange, where the benchmark weighted index ended down 1.16 percent at 11,612.81, with investors concerned over the economic impact as the virus continues to spread, dealers said.

The stock came under pressure soon after the local main board opened as investors took their cue from a 1.37 percent fall in AUO's American depositary receipts on the U.S. market overnight in the wake of the flat panel maker's fourth quarter results.

At an investor conference held Thursday, AUO reported that it incurred a net loss of NT$19.16 billion or NT$2.00 per share in 2019, the first net loss since 2012, when the flat panel marker posted a loss of NT$6.19 per share.

AUO said the 2019 net loss partly reflected a fall in flat panel product prices on the back of an increase in supply as Chinese manufacturers raised production capacity.

Due to falling product prices, AUO saw its consolidated sales for 2019 fall 12.6 percent from a year earlier to NT$268.79 billion.

In addition, AUO said more than NT$2 billion of its losses resulted from a move by the company to write off unprofitable assets in its solar energy business, which also suffered large losses in the year.

In the fourth quarter, AUO incurred NT$8.83 billion in net losses or NT$0.92 per share, compared with NT$3.99 billion in net losses or NT$0.41 per share in the third quarter, data released by the company showed.

The steeper loss in the fourth quarter came after the average selling price for flat panels fell from US$312 per square meter in the third quarter to US$298 in the fourth quarter, AUO's data showed.

In the fourth quarter, AUO shipped 26.53 million large sized panels, down 7.5 percent from a quarter earlier, while its shipment of small and medium sized screens stood at 37.46 million, up 5.2 percent from a quarter earlier.

For the whole of 2019, AUO's sale of large sized panels fell 5.7 percent from a year earlier to 108 million units, and it sale of small and medium sized screens also fell 21.4 percent to 131 million units.

At the investor conference, AUO Chairman Paul Peng (???) said 2019 was a challenging year for the flat panel industry worldwide.

However, Peng said several major suppliers outside China such as Samsung Display Co. and LG Display Co. have announced plans to cut production and the current Wuhan virus spread could force Chinese makers to reduce output, moves that are likely to reduce the supply glut this year.

Source: Focus Taiwan News Channel