DFI's Profit Margins Rebounded in Q4, Gross Profit Margin Reached a 4-year High for the Same Period
DFI, the world leading brand in embedded motherboards and industrial computers (IPC), announced the consolidated financial statements for the fourth quarter and all of 2023 today (the 4th). Though DFI was impacted by wider environmental factors in 2023, the company still saw its profit margins rebound thanks to increasing demand in the Japanese market and optimizations to the operating structure at the end of the year. DFI’s gross profit margin in the fourth quarter was 28%, a 4-year high for the same period. The consolidated revenue and net profit margin attributable to the parent company all outperformed the previous quarter, while the operating profit margin rebounded for two straight quarters. The annual gross profit margin was 27%, higher than the previous three years. The company's overall operating performance continued to show steady growth.
Statistics from the Ministry of Economic Affairs show that, in 2023, worldwide economic and trade momentum was affected by inflation and high interest rates worldwide, while the demand in end markets remained sluggish. In addition, continuous adjustment of inventories took place throughout industrial chains. The total production value of the manufacturing industry in the fourth quarter was NT$4.6202 trillion; though this was the fifth consecutive quarter of negative growth, the rate of decline has slowed, and the industrial production index has reached 91.78, a rise of 3.64% compared to the third quarter. Of this, the manufacturing industry saw a 4.44% increase.
DFI Vice Chairman Michael Lee noted that DFI benefited from strong market demand in the fourth quarter to achieve strong performance, while over the past year the company has prioritized increasing its gross profit margin and the improving the company's overall constitution, and has strongly committed to achieving various operational indicators. These efforts have, as expected, been reflected in the rise in profit margins. In the future, DFI will continue to prioritize high value-added business while keeping a close eye on the progress of the industry's recovery.
Alexander Su, President of DFI, stated that the company's embedded business benefited from adjustments to product portfolios the recovery of the Japanese market in the fourth quarter. The company's long-term preparations are starting to bear fruit, which is being shown in the company’s performance. Over the past year, DFI has been impacted by the external environment, but with major economies gradually showing signs of lowered inflation, and with new projects taking place all over the world, the company can expect to see a recovery in orders back to a healthy level. Thus, the company's overall operations are showing a positive growth trend.
DFI’s fourth quarter consolidated revenue was NT$2.183 billion, up 4% QoQ and down 23% YoY. Gross operating profit was NT$614 million, up 19% QoQ and down 16% YoY. Earnings per share (EPS) was NT$0.74. Gross profit margin was 28%, up 4% and 2% respectively QoQ and YoY. Operating profit margin was 6.1%, up 2.3% QoQ and outperforming the previous two quarters, while down 2.2% YoY. Net profit margin attributable to the parent company was 3.9%, up 1.3% QoQ and down 0.9% YoY. Due to customers pulling inventory early in the second half of 2022, which affected the base period, the 2023 consolidated revenue was NT$9.184 billion, down 16% YoY. Gross operating profit was NT$2.435 billion, down 11% YoY. Gross profit margin was 27%, up 2% YoY. EPS was NT$3.16.
Additionally, today DFI's board of directors approved the earnings distribution for 2023, with expected dividends at NT$3 per share. Calculated based on Monday’s closing price of NT$63.8, the dividend yield is 4.70%. It was also announced that the consolidated revenue was NT$552 million in February. Due to the loss of the equity in the subsidiary Brainstorm this month, consolidated revenue was down 20.24% MoM and down 51.97% YoY. DFI’s aggregated consolidated revenue was NT$1.243 billion for January through February of this year, reflecting a 47.30% decrease YoY.
DFI will be participating in six major international exhibitions in the first half of this year, including the world’s largest embedded electronics and IPC event Embedded World 2024, COMPUTEX TAIPEI 2024, and IT Week in Japan, at which DFI will be showcasing a series of AI applications and new products for unmanned services. DFI will continue to work with its group partners and subsidiaries to create maximum value for customers in the embedded, cybersecurity, and smart automation industries, becoming the best partner in corporate OT smartification.