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Compal Electronics has recognized losses of NT$2.9 billion (US$97.44 million) in its second-quarter financial results from bad debts from LeEco. Compal so far has lost NT$4.28 billion arising from LeEco’s financial crisis.
Compal president Ray Chen also noted that the company will take a more cautious approach to choosing its smartphone client. Compal also announced to halt its participation in LeEco’s fundraiser.
Within the NT$2.9 billion in loss, NT$402 million was from component inventory stored for LeEco and the amount undermined the company’s gross margin in the second quarter by 0.2pp, while NT$2.598 billion was from uncollected account receivables, which reduced th ecompany’s gross margin by about 1.2pp.
Chen also noted that Compal will look to sell the component inventory and will appoint lawyers to file lawsuits against LeEco.
Compal’s smartphone production lines have also been shifted to making tablets and wearable devices.
Compal’s consolidated revenues were NT$213.78 billion in the second quarter, up 14% sequentially and 24% on year, while consolidated operating net profits were NT$892 million, down 63% on year because of the losses from LeEco. The company’s net profits in the second quarter reached NT$417 million and EPS were NT$0.06.
Ray Chen, Compal president
Photo: Michael Lee, Digitimes, August 2017
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