D-Link 2010 Q2 Operation Review

2010-08-19

For the second quarter of 2010, D-Link posted a net revenue of NT$8.217bln, up 3.9% over 1Q10, or up 17.0% compared to the year-ago figure. Due to surprisingly huge depreciation in Euro currency, freight cost increase, and product mix shifting towards more commodity switches and broadband products, gross margin excluding inventory related gain/loss dropped to 32.2% in 2Q10 from 34.7% in 1Q10, but up by 3.3% compared to 28.9% of the year-ago quarter. By applying Article number 10 of Taiwan's GAAP, gross margin including inventory provisional gain/loss was 30.8% in 2Q10, down by 3.0% from 33.8% in 1Q10, or compared to 33.6% of the comparable 2009 quarter due to a substantial reversal of inventory provision of NT$325mln in 2Q09. Operating expenses of 29.1% of net revenue was down from 30.1% in the previous quarter, or compared to 31.6% in 2Q09. Operating profit margin was 1.7%, down by 2.0% from 3.7% in 1Q10, or compared to 2.0% in 2Q09.