Innolux Reports Improved Revenue and Margins in Q3’23 Despite Lower Panel Shipments

Innolux delivered improved revenue and profitability in Q3’23 driven by panel price increases, despite lower shipments. The company expects this dynamic of lower volumes but steady pricing to continue into Q4’23. Innolux says it remains focused on cost management and optimizing product mix to maintain stable financial performance. Display components made up 78% of sales, while non-display components were 22% of sales.

Innolux ($thousands)Q3’23 % of SalesQ2’23% of SalesQ3’22% of Sales
Net Sales$1,776,675$1,697,136$1,479,373
Cost of Goods Sold$1,648,67892.8%$1,696,78599.4%$1,767,465118.7%
Gross Profit$128,4647.2%$10,9410.6%$(279,000)-18.7%
Operating Expenses$177,5999.9%$176,65210.4%$197,77313.3%
Operating Profit(Loss)$(49,135)-2.7%$(165,711)-9.7%$(476,773)-32.0%
Net Non-operating Income(Exp.)$7,3780.4%$6,3860.4%$97,0226.5%
Profit(Loss) before Tax$(41,757)-2.3%$(159,325)-9.3%$(379,751)-25.5%
Net Profit(Loss)$(58,435)-3.3%$(177,240)-10.4%$(394,320)-26.5%

Revenues were NT$57.7 billion ($1.78 billion), up 4.7% from Q2’23. This revenue growth was driven by continued increases in panel pricing and customers building inventories ahead of peak seasonal demand. Operating loss narrowed to NT$1.6 billion ($49.13 million), versus an operating loss of NT$5.3 billion ($165.71 million) in Q2’23. This improved operating performance was attributed to effective cost control measures by the company.

Panel shipments totaled 6.47 million square meters, down 6.7% from Q2’23. However, blended average selling price (ASP) for TFT-LCD panels increased to $279 per square meter. By application, TV panels accounted for 37% of sales, mobile PCs 22%, automotive 21%, mobile phones/consumer products 13%, and desktops 7%. By size, panels 10-inches and smaller accounted for 15% of sales, 10-20-inches 33%, 20-30-inches 15%, 30-40-inches 7%, and 40-inches and above 30%.

For the fourth quarter outlook, Innolux expects to see large panel shipments to decrease high single digits sequentially, while blended ASP should remain flat. Small and medium panel shipments are expected to decrease by double digit percentages QoQ.