D-Link 2012 Q2 Operation Review

2012-08-30

For the second quarter of 2012, D-Link posted net revenue of NT$7.72 bln, down 6.1% from sequential quarter and down 3.8% from same period last year due to generally weaker end demand especially in regions worst affected by the global debt crisis.     Gross margin excluding inventory provisional gain/loss was 28% in 2Q12, down from 29.7% in 1Q12,   due to unfavorable FX currency movement and promotion strategy to speed up stock rotation in preparation for the cloud products launch.  Gross margin including inventory provisional gain/loss was 26.7% in 2Q12, down from 29.7% 1Q12.  Operating expenses as percent of net revenue was 27.9%, up from 26.8% in previous quarter due to lower revenue base.  On absolute dollar term, operating expenses was 2% lower than previous quarter.  Operating margin was -1.2% in 2Q12, as compared to 2.9% in first quarter.  Net non-operating profit in 2Q12 was NT$90 million comprising of NT$94 million income recognized from long term investee companies under equity method, NT$9 million investment gain, NT$59 million foreign exchange loss and NT$46 million derived from financial and other income.  The Group reported second quarter consolidated net loss after tax and minority interest of NT$7 million and EPS was –NT$0.01 per share based on weighted average capital of NT$6.356 billion.