TPV costs revamp of Philips business
TPV Technology, the world's largest flat panel monitor manufacturer by volume, said yesterday it would spend US$5 million to US$10 million restructuring its newly acquired Royal Philips Electronics monitor business.
The US$358 million acquisition, announced late last year, was completed on Monday.
'We expect the consolidation of Philips' business will take six months to a year to complete,' TPV chairman Jason Hsuan said yesterday, adding that the company expected to benefit from annual cost savings of about US$100 million after three years.
The deal brought TPV two production plants in China, one in Suzhou, Zhejiang province, and another in Guangdong, and a research and development centre in Taiwan.
Mr Hsuan said there was no plan to close plants or make big lay-offs at the Philips units.
'We are increasing our shipment of monitors and LCD (liquid crystal display) TVs, so we need staff,' he said.
However, several production lines would be shifted from Philips plants to TPV's plant in Fujian to save costs, a TPV official said.
TPV is now responsible for the production of Philips brand flat panel LCD monitors and televisions for the Asian market, and low-priced LCD televisions for the United States market.
Following the acquisition, the total shipment of monitors and televisions this year will reach 36 million units. The company aims to increase shipment by almost 40 per cent to 50 million units by 2010.
'We plan to ship 40 million units of monitors and 10 million units of LCD TVs in 2010,' Mr Hsuan said. The company will ship two million LCD televisions next year.
TPV yesterday announced that net earnings for the six months to June rose 5.38 per cent to US$64.8 million, while revenue rose 1.85 per cent to US$1.82 billion. Earnings per share were 4.61 US cents.
The company increased its dividend by 44 per cent from a year earlier to 0.72 US cent per share.
'As we are cash-rich, the company intends to raise the full-year payout ratio for 2005 to 30 per cent, while last year's was 20 per cent,' Mr Hsuan said.
The company's gross profit margin in the second quarter expanded 0.3 percentage point from the previous quarter to 6.4 per cent.