Innolux to cut paid-in capital by 12% to increase returns to shareholders
![CNA file photo](https://imgcdn.cna.com.tw/Eng/WebEngPhotos/800/2024/20240422/854x580_526766381822.jpg)
Taipei, April 22 (CNA) Innolux Corp., one of Taiwan's leading flat-panel makers, has decided to reduce its paid-in capital by 12 percent to increase the amount paid to shareholders and up its pace of business restructuring.
Innolux said in a statement released at the weekend that the capital reduction plan will cut its paid-in capital by more than NT$10.89 billion (US$334 million), or 12 percent, to NT$79.89 billion.
This comes after the flat screen supplier incurred a net loss for the eighth consecutive quarter amid global demand weakness.
Paid-in capital is the total money invested in a company in exchange for shares of its stock.
The plan is pending approval from regulators and shareholders, and if passed, Innolux said about NT$1.2 per share will be returned to shareholders.
It would also mark the third straight year Innolux has lowered its paid-in capital.
Innolux said the company has adopted a business strategy called "More than Panel" to improve operation efficiency, which will see it transform into two major business divisions: "Display Domain" and "Non-display Domain."
Innolux said while it will continue to improve its screen product portfolio, it will also intensify efforts in the area of non-display item development, such as smart healthcare and IC packaging and testing services.
To strengthen the company's competitiveness and meet demand, Innolux said it will continue to use big data analysis and artificial intelligence in its smart manufacturing.
In the first quarter, Innolux incurred NT$4.1 billion in net loss, following a net NT$3.24 billion loss in the fourth quarter of last year.
Innolux added that its depreciation and amortization costs hit NT$7.8 billion and capital expenditure totaled NT$4.5 billion in the first quarter.
During the January-March period, Innolux posted NT$50.5 billion in consolidated sales, down 5.5 percent from a quarter earlier, due to slow season effects and the reduced number of working days due to the Chinese Lunar New Year holiday, which fell in February.
Innolux said the company shipped 6.02 million square meters of total panels in the first quarter, little changed from the previous quarter, while the average selling price stood at US$263 per quarter meter.
According to Innolux, its display operations accounted for 75 percent of its total revenue in the first quarter with the non-display operations making up the remaining 25 percent.
In the first quarter, TV screens accounted for 37 percent of total sales, automotive products 24 percent, portable computer screens 19 percent, screens used in smartphones and mobile PCs 15 percent, and desktop computer screens 5 percent, Innolux said.
Looking ahead, Innolux said with three major sports events -- including the 2024 Summer Olympics -- approaching, demand for TV screens is expected to increase in the second quarter, while China's shopping spree in mid-June is expected to boost panel shipments in the quarter.
Innolux said shipments in the second quarter are forecast to grow around 11-13 percent from the first quarter, while shipments of small and medium-sized screens are expected to fall at a high single-digit rate.
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