Power and thermal management solutions provider Delta Electronics Inc (台達電) on Friday said it aims to achieve double-digit percentage growth in revenue this year, but warned of headwinds ahead as COVID-19 lockdowns in China cause supply chain disruptions, affecting business at its automation unit in particular.

The company said it has suspended production lines at its manufacturing plant for industrial automation products in Wujiang District of Suzhou, China, to comply with the local government’s lockdown measures.

The outlook for this quarter depends on whether local suppliers can produce and deliver on schedule this month, it said.

Photo: Chen Rou-chen, Taipei Times

The main problems remain cross-provincial road transportation and logistics backlogs in China, it added.

While raw material costs have stabilized, rising inflation and COVID-19 flare-ups would remain uncertain factors in the second half of this year, Delta said.

The company said Western sanctions against Russia over its invasion of Ukraine pose no risk to its global expansion plans.

The company is constructing new plants in Taiwan, China, India and Thailand to enhance production capacity, while also seeking suitable manufacturing sites in eastern Europe and the US, it said.

Delta said it has installed solar panels on the roofs of all of its plants to generate electricity and is considering using its own energy storage equipment at each plant.

The company plans to negotiate with the Indian government to build a solar power plant there, it said, adding that it has set up a special team focusing on hydrogen power generation.

In the January-to-March quarter, the company reported a 7.93 percent annual drop and a 3.19 percent quarterly decline in net profit to NT$6.06 billion (US$205.6 million).

That translated into earnings per share of NT$2.33, down from NT$2.42 in the previous quarter and NT$2.53 a year earlier.

Gross margin was 27.3 percent last quarter, up from 26.78 percent a quarter earlier, but down from 29.8 percent a year earlier.

The company blamed the decline in net profit on higher income tax payments and lower non-operating gains, even though revenue rose 13.87 percent annually to NT$82.54 billion in the first quarter.

The power electronics segment was the biggest driver of Delta’s business, generating revenue of NT$49.24 billion, making up 60 percent of its total revenue in the first quarter.

It was followed by infrastructure and automation segments, which posted revenue of NT$21.37 billion and NT$11.73 billion, accounting for 26 percent and 14 percent respectively, company data showed.

By product, automotive electronics reported the highest growth, as the company had landed orders for electric vehicles years earlier and was less affected by external changes, Delta said.

What might deserve attention ahead is the supply of semiconductors and the production schedule of automakers, it said.

Demand for electronic components for servers and data centers remained robust last quarter, as electronics manufacturing service providers continued to demand supplies to fulfill orders, Delta said.

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