DFI Optimizes its Operating Structure, Leading to Positive Gross Profit Margin Growth in Embedded Business
DFI (2397), the world leading brand in embedded motherboards and industrial computers (IPC), announced its third quarter consolidated financial report on November 1st. Faced with weak global economic growth and slow economic recovery in China, customers have been conservative in placing orders. DFI's third quarter consolidate revenue was NT$3.922 billion, representing quarterly increase of 4% and an annual decrease of 4%. Its operating profit was NT$713 million. It is worth mentioning that the gross margin of DFI's embedded business is showing positive growth due to the optimization of the overall operating structure. In the future, DFI will continue to focus on high value-added businesses and optimize various operating indicators.
DFI's cumulative consolidated revenue in the first three quarters was NT$11.503 billion, showing an annual decrease of 3%, the operating profit was NT$2.327 billion, and earnings per share (EPS) was NT$2.42. The gross operating profit margin was maintained compared to the same period last year. The operating profit rate and net profit after tax rate attributable to the parent company decreased compared to the same period last year, to 3.5% and 2.4% respectively.
In terms of single-quarter performance, due to inventory depreciation leading to loss and the slow recovery of economic and market conditions, DFI's consolidated revenue was NT$3.922 billion, showing a quarterly increase of 4% and annual decrease of 4%. The gross operating profit was NT$713 million, showing a quarterly decrease of 8% and a double digit decline compared to the same period last year. The EPS was NT$0.47. Embedded business customers have conducted inventory adjustments in the third quarter, which should lead to a recovery in customer demand next year. Demand from Security customers has rebounded and is currently increasing. The overall inventory of each business continues to decline, gradually returning to the healthy levels in 2020.
The embedded business gross profit margin of DFI has improved and shown positive growth in response to the optimization of the company's operating structure and product costs. In the future, DFI will continue to focus on strengthening high-value-added businesses in the medical, new energy applications, and rail transportation sectors. Currently, various regional markets are also gradually receiving new projects. After the official sale of the subsidiary, Brainstorm, on October 1, DFI will work with other subsidiaries to create maximum value for customers in the embedded, information security, and smart automation industries, becoming the best partner in corporate OT smartification.