Delta foresees Q2 rebound [Bangkok Post, Thailand]

May 07--The SET-listed Delta Electronics (Thailand) projects a revenue rebound from this quarter onward after experiencing a decline in the first three months.

The country's largest electronics firm is maintaining its full-year sales target at US$1.3 billion.

Delta reported total revenue of $280 million in the first quarter, sliding 6% year-on-year and quarter-on-quarter. Net profit, meanwhile, increased substantially from the year before and compared with the previous quarter.

The company is expected to report quarterly financial results to the Stock Exchange of Thailand later this week.

Anusorn Muttaraid, Delta's executive director, said the solar inverter business had yet to recover, especially in Europe, but sales are anticipated to improve in the second quarter, as the product was launched in Australia and New Zealand and received a good response.

Customer inventories have been used up, and Delta expects new orders to be placed.

Thailand's floods last year severely affected the supply chain of the electronics industry, so many customers built up their inventories in the fourth quarter on shortage fears, said Mr Anusorn.

Its revenue estimate calls for 10% growth from last year. Capital expenditure for capacity expansion remains unchanged at $40 million.

The increased daily minimum wage has only slightly affected Delta, which hires 11,000 people in Thailand. Production costs have edged up by 1%, and the company has attempted to improve productivity to offset the cost, he added.

Mr Anusorn said Delta will this week propose to its board a restructuring of its Indian operations in response to changing conditions in the telecom segment and to gain a higher margin.

The restructuring, which it would not discuss, is slated for the second half of this year.

Analysts expect Delta to post a 15% year-on-year increase in net profit to 625 million baht in the first quarter with improved gross margins.

Kiatnakin Securities raised Delta's net profit outlook for 2012 by 22% to 3.2 billion baht.

DELTA shares closed Friday on the Stock Exchange of Thailand at 25 baht, down 50 satang, in trade worth 44.5 million baht.