Financial Performance - For the six months ended June 30, 2019, the company's revenue was $1,918.3 million, an increase of 11.6% compared to $1,719.4 million in the same period of 2018[13]. - Gross profit for the same period was $376.4 million, reflecting a 27.7% increase from $294.7 million year-over-year[13]. - Operating profit decreased by 12.9% to $121.8 million from $139.8 million in the prior year[13]. - Net profit attributable to the company's owners was $101.8 million, down 5.6% from $107.6 million in the previous year[13]. - The gross margin improved to 19.6% from 17.1%, an increase of 14.6% year-over-year[11]. - The operating profit margin decreased to 6.4% from 8.1%, a decline of 21.0%[11]. - Revenue for the six months ended June 30, 2019, was $1,918 million, an increase of 11.6% compared to $1,719 million for the same period in 2018[24]. - Net profit for the period decreased by 5.6% from $107 million for the six months ended June 30, 2018, to $101 million for the same period in 2019, with a profit margin decline from 6.2% to 5.3%[35]. - Basic earnings per share for the company owners was $1.55, slightly down from $1.60 in the previous year[61]. - The company reported a decrease in cash and cash equivalents of $19,587 thousand for the six months ended June 30, 2019, compared to an increase of $347,088 thousand in the same period of 2018[68]. Revenue Segmentation - The mobile devices segment saw a revenue decline of 9.4% due to the removal of headphone jacks in new smartphone models[16]. - Revenue from the communications infrastructure segment decreased by 3.0% due to reduced customer demand[16]. - Revenue from the computer and consumer electronics segment dropped by 21.5% due to changes in product design and new gaming console models[16]. - Revenue from the automotive, industrial, and medical terminal markets increased by 100.5% for the six months ended June 30, 2019, compared to the same period in 2018[17]. - Revenue from the smart home market increased by 3,235.9% for the six months ended June 30, 2019, compared to the same period in 2018, following the acquisition of Belkin International[19]. - Revenue from the smart accessories market increased by 662.9% for the six months ended June 30, 2019, compared to the same period in 2018, also due to the acquisition of Belkin International[19]. - Revenue breakdown by region shows a significant increase in the US market, reaching $732,352 thousand, up 27.8% from $573,223 thousand in 2018[92]. - Revenue from China decreased to $518,174 thousand, down 19.2% from $640,836 thousand in 2018[92]. Expenses and Costs - R&D expenses rose by 34.4% to $121 million for the six months ended June 30, 2019, due to ongoing investments in 400G optical communication products and automotive applications[32]. - Distribution and selling expenses increased by 90.0% to $57 million, mainly due to the acquisition of Belkin International[30]. - Administrative expenses rose by 68.6% to $86 million, driven by the acquisition of Belkin International and increased employee compensation[31]. - Cost of goods sold for the period was $1,025,979 thousand, an increase of 19.2% from $861,028 thousand in 2018[96]. Cash Flow and Liquidity - Cash generated from operating activities for the six months ended June 30, 2019, was $256,464 thousand, down from $374,996 thousand in the same period of 2018, resulting in a net cash inflow of $200,323 thousand[68]. - The company incurred a net cash outflow from investing activities of $96,546 thousand, compared to $45,350 thousand in the previous year, primarily due to increased purchases of property, plant, and equipment totaling $111,712 thousand[68]. - The financing activities resulted in a net cash outflow of $123,364 thousand, significantly impacted by the repayment of bank loans amounting to $862,655 thousand[68]. - As of June 30, 2019, cash and cash equivalents amounted to $1,044 million, down from $1,065 million as of December 31, 2018[36]. Assets and Liabilities - Total assets as of June 30, 2019, amounted to $4,263,819 thousand, a decrease from $4,309,744 thousand at the end of 2018[64]. - Total liabilities were $2,299,123 thousand, down from $2,362,416 thousand, indicating a reduction in overall debt[65]. - Trade receivables decreased from $935 million as of December 31, 2018, to $805 million as of June 30, 2019, due to improved management of overdue receivables[45]. - Trade payables decreased from $722 million as of December 31, 2018, to $708 million as of June 30, 2019, primarily due to seasonal procurement reductions[46]. Strategic Focus and Future Outlook - The company plans to focus strategically on mobile devices, automotive, industrial, and medical terminal markets, which are anticipated to be the main growth drivers in the second half of 2019[22]. - Strong demand is anticipated for headphones and related products, with plans to further penetrate the Android smartphone customer base[22]. - The company plans to continue its market expansion and product development strategies to enhance future growth prospects[115]. - The company is considering strategic acquisitions to enhance its product portfolio, with a budget of $300 million allocated for potential mergers[163]. Corporate Governance and Compliance - The board of directors has adhered to the corporate governance code and principles applicable to the company, with a commitment to high standards of corporate governance[154]. - The audit committee, consisting of three independent non-executive directors, reviewed the unaudited condensed consolidated interim financial information for the six months ended June 30, 2019[158]. - The company confirmed no significant changes in financial information compared to the disclosures in the 2018 annual report as of June 30, 2019[159]. Shareholder Information - The company’s major shareholders include Lu Songqing with 123,720,000 shares, representing 1.83% of the total shares[140]. - Foxconn holds 5,179,557,888 shares, representing 76.48% of the total equity[144]. - The share option plan allows for a maximum issuance of 130,000,000 shares, approximately 1.9% of the issued share capital as of the adoption date[150].
FIT HON TENG(06088) - 2019 - 中期财报