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AIDC Releases Q1 2017 Results at Investor Conference

 
2017/4/13 

AIDC announced today consolidated results for its fiscal 2017 first quarter and its recent achievements and prospects. AIDC posted the first quarter of 2017 revenue of NT$5.918 billion, with a gross margin of -6.48% compared to the same period of last year. The annual revenue of 2016 was reported at NT$27.33 billion, net income after tax at NT$2.083 billion, EPS at NT$2.29/share with revenue, net income and EPS reaching the record levels. Plan for stock dividend distribution is NT$1/share for cash dividend, and NT$0.37/share for stock dividend, however these are pending approval at the Shareholders Meeting.

AIDC Chairman Anson Liao presided over the investor conference when Acting President Kang Shiah gave a presentation explaining that the decline of Q1 2017 revenue was mainly attributed to: (1) airlines delay with new aircraft replacements due to the drop of international oil prices; and (2) demand for CFM56 engine is being replaced by LEAP engine; however revenue is expected to grow following the certification of LEAP engine parts and other new products and new processes. While the forecast of global commercial aviation industry remains optimistic with strong demands for new airplane and growth of annual production, backlog continues to grow with deliveries estimated to take place over the next 8 to 9 years.

AIDC’s commercial business is focused on composite parts and assemblies, AIDC has been successful in winning contracts for supplying Boeing B737 MAX elevator composite parts and Airbus A320 series After Belly Fairing composite assemblies. In addition, AIDC established the TACC-19 composite plant dedicated to the manufacture of Airbus parts, which is expected to begin contributing to revenue after both Process and First Article Inspection are certified. As for the military business, the ROCAF has budgeted NT$68.64 billion for the new Advanced Jet Trainer (AJT) program to be executed from 2017 to 2128. Following the AJT agreement was signed between the Ministry of National Defense and the National Chung Shan Institute of Science and Technology (NCSIST), which was witnessed by President Tsai Ing-wen on Feb. 7, a commission agreement is expected to be signed between AIDC and NCSIST with supplier solicitation conventions being held to invite more supply chain partners to participate in the program.

The three major investment projects include; ECMC #3, TACC-19 plant and F-16A/B Maintenance Building which had been completed with operations started in 2016 and 2017 as scheduled. Furthermore, AIDC introduced intelligent manufacturing and management and turned #8 Mechanic Shop and ECMC Caseline #3 and TACC into Industry 4.0 demonstration plants with the intent of sharing AIDC's experience with and providing assistance to domestic suppliers in their transformation effort.

Like the flying fish caught between threats from the air and in the water, Taiwan’s aerospace industry is similarly confronted with multiple challenges, which include; trade protectionism and Industry 4.0 intelligent machinery from the advanced countries, manufacturing shifting from North America and Europe to the emerging countries which are supported by government resources, low cost clusters and low labor cost; new supplier strategies imposed by major aerospace companies, such as Boeing’s “Partner for Success”, which require suppliers to apply innovative thinking to reduce price. In the face of harsh competition and challenges, Taiwan’s aerospace industry must meet them head-on in order to survive in the global market.