DELTA’s 2Q19 Profit Drops 37% to 872m due to the Increase of Selling and Admin Expenses

Delta Electronics (Thailand) Public Company Limited (DELTA)  has reported its 2Q19 consolidated financial statement through the Stock Exchange of Thailand as follows:

DELTA has recorded a net profit in the second quarter of 2019 at THB 872.59 million, decreased 37.24% YoY.
Sales revenues and Service Income of this quarter amounting to THB 13,915 million, went up 6.0% YoY and 7.5% QoQ. Major contributions were increased demand in Network Switch products and Industrial Tools products.

Gross profit in this quarter amounted to THB 2,772 million, a 4.0% drop from the same quarter last year and a 6.9% drop from the last quarter this year. This was due to the slowdown in the telecommunication business in India and weakened demand in the electronics component market which impacted inventory revaluation.  As a result of the above factors, Q2’19 gross margin dropped to 19.9%, compared to 22.0% in the same quarter last year and 23.0% in the last quarter this year.

Selling and administrative expenses (including research and development – R&D) in Q2’19 went up 21.0% from Q2’18 and up 5.8% from Q1’19 due to R&D and sales force investments for new product development and enhancement to catch up with the rapidly changing technology and the dynamics of borderless marketing.

Operating profit in Q2-19 totaled THB 658 million, THB 483 million down from the same quarter last year, making a drop from 8.7% to 4.7% in operating profit margin. This follows the increase of Selling and Administrative expenses as mentioned previously.