LCD Backlight Business Drives Recovery, Leading to Positive Profit Outlook Despite Industry Challenges
CDW, a specialist in precision components, has issued a profit guidance indicating a consolidated operating profit for the second half and the full year ended December 31, 2021, with results expected to be released on or before March 1, 2022.
The company reported a significant recovery in its LCD backlight business, which has substantially improved its overall operating performance for the second half of 2021. This recovery has occurred despite the ongoing challenges of the COVID-19 pandemic and the global shortage of semiconductor chips, which has affected industries, including the automobile sector.
The group’s original equipment manufacturing (OEM) business experienced a major turnaround, with “orders from major customers recovering significantly,” leading to growth in key product lines. Notably, CDW estimates a 64% year-on-year increase in its automotive digital instrument panel shipments in 2021.
In addition to the growth in shipments, the company saw a 63.9% rise in the volume of LCD backlight units shipped for automotive display units and a 56.3% increase in their sales value for 2021. The backlight units segment also saw a 3.8% annual growth in shipment volumes and a 12.2% increase in segment revenue compared to the previous year.
CDW’s LCD backlight units are primarily used in luxury car instrument panels for major US and German car brands, and the company announced that it will begin supplying one of the largest Japanese car brands starting in October 2022.
Despite a wider loss of US$1.1 million for the first half of 2021, compared to a loss of US$351,000 in H1 FY2020, CDW experienced a significant surge in revenue—up 28.3% to US$63.5 million, driven by the growth of its LCD backlight unit segment. The loss was mainly attributed to higher distribution and administrative expenses, including increased material and transportation costs, as well as salary-related expenses and legal fees.
For the full financial year 2020, CDW had posted earnings of US$1.5 million, reversing a loss of US$1.9 million from the previous year, with an earnings per share (EPS) of 0.66 US cents, compared to a loss per share of 0.83 US cents in FY2019.
Following the announcement, shares of CDW rose by S$0.02, or 7.8%, to S$0.275 on Tuesday.
