Taiwanese electronics giant Hon Hai Precision Industry has published its financial report for the fourth quarter of 2008, and states because its customers continue to squeeze profits, the company's own net profit decreased by 65% year-on-year, though its revenue increased by 20%.
As the foundry of Nokia and Apple, as well as owner of the Foxconn subsidiary, Hon Hai Precision Industry realized a net profit of NTD9.305 billion, which is equal to about USD267 million, in the fourth quarter as of December 2008. The number was NTD26.55 billion in the same period of 2007. The company's quarterly revenue increased 20% to NTD1.5 trillion, but its net profit rate decreased 41% to 3.7%.
The main reasons for the net profit decline are attributed to customers' reduction of budgets and the rise of production costs in the costal cities in China. According to Edmund Ding, spokesperson of Hon Hai Precision Industry, because of the unclear prospects and the economic depression in Western countries, customers have become very cautious on their expenditure.
Although Hon Hai did not provide its expectations in the financial report, its chairman Terry Guo is optimistic and says the industry perspective is not that bad and the company has increased employees by 5% in the Chinese mainland to handle new contracts.
In addition, Guo says the company soon plans to extend its business from pure manufacturing to software and supporting services.