Darfon Electronics (8163) Q3 2024 earnings summary

Executive summary

• 3Q24 revenue reached NT$5,351 million, up 2.9% sequentially but down 21.8% year-over-year, reflecting PC/NB seasonality, industry recovery, and bicycle inventory adjustments.

• Revenue for the nine months ended September 30, 2024 was NT$15,659.9 million, down from NT$19,732.7 million year-over-year, mainly due to a significant decline in green energy product sales.

• Net income for 3Q24 was NT$138 million, a 14.1% decrease sequentially and an 88.1% drop year-over-year; net income attributable to shareholders for the nine months was NT$505.1 million, compared to NT$1,445.4 million in the prior year period.

• Operating income declined 22.1% sequentially and 26.0% year-over-year for 3Q24; for the nine months, operating income was NT$548.4 million, down from NT$865.8 million year-over-year.

• The company completed a major acquisition of Grofa Action Sports GmbH to strengthen its e-mobility channel in Europe.

Financial highlights

• 3Q24 gross profit was NT$971 million, up 0.5% sequentially but down 17.8% year-over-year; gross margin for the nine months was 19%, consistent with the prior year.

• Operating expenses were NT$822 million in 3Q24, representing 15.4% of sales.

• Basic EPS for 3Q24 was NT$0.68, compared to NT$0.62 in 2Q24 and NT$3.86 in 3Q23; basic and diluted EPS for the nine months were NT$1.82 and NT$1.80, respectively, compared to NT$5.17 and NT$5.06 in the prior year.

• Cash and cash equivalents at September 30, 2024 were NT$3,927 million, down from NT$5,422 million a year earlier.

• Net non-operating items contributed NT$82 million in 3Q24, a significant sequential increase.

Segment performance

• IT Peripherals accounted for the largest share of product mix in 3Q24, followed by Green Energy and Integrated Components.

• Product mix has shifted slightly toward Green Energy and Integrated Components over recent quarters.

• Intelligent products revenue for the nine months was NT$11,339 million, up slightly year-over-year.

• Green energy products revenue dropped sharply to NT$4,321 million from NT$8,819 million year-over-year.

• Segment profits are not allocated due to the OEM business model; revenue is the main performance metric.