Nanya Technology Corporation ((NNYAF)) has held its Q4 earnings call. Read on for the main highlights of the call.
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In its latest earnings call, Nanya Technology Corporation presented a mixed sentiment reflecting both achievements and challenges. The company reported notable year-over-year revenue growth and strategic advancements in AI products, signaling progress. However, significant quarterly revenue declines, ongoing net losses, and operational challenges underscore persistent issues. The sentiment of the call leans towards cautious optimism as the company outlines future plans to address these ongoing weaknesses.
Year-over-Year Revenue Growth
For the year 2024, Nanya Technology reported a 14.2% increase in net sales compared to 2023, with total sales reaching TWD 34.132 billion. This growth highlights the company’s ability to expand its market presence despite a challenging economic environment.
Improvement in Gross Profit
The company saw a significant improvement in gross profit, reducing losses from minus TWD 4.483 billion in 2023 to minus TWD 421 million in 2024. This reduction indicates effective cost management and operational efficiencies.
Strategic Product Developments
Nanya Technology is advancing its strategic product developments, planning to introduce products targeting AI edge computing by 2026. The launch of its 16-gigabit DDR5 is a step forward, with increased volume expected in 2025.
ESG Achievements
The company continued to make strides in ESG, receiving multiple recognitions. It was listed on the DJSI World Index for the fourth consecutive year and had its MSCI ESG rating upgraded to AA, reinforcing its commitment to sustainability.
Significant Decline in Quarterly Revenue
The fourth quarter of 2024 saw a net sales decline to TWD 6.575 billion, a 19.2% decrease from the previous quarter. This drop was attributed to decreased average selling prices (ASP) and bit shipment.
Negative Net Income and Earnings Per Share
For Q4 2024, Nanya Technology reported a net income loss of TWD 1.574 billion and an EPS of minus TWD 0.51. The entire year’s net income was a negative TWD 5.083 billion, highlighting ongoing financial challenges.
Weak Demand in Non-AI Markets
The company experienced weak demand for general PC, mobile, and consumer products in Q4 2024, reflecting broader market challenges outside the AI sector.
Operational Challenges
Operational income for 2024 was a negative TWD 10.555 billion. Q4 was particularly impacted by power outages and production reductions, contributing to significant losses.
Forward-Looking Guidance
Looking ahead, Nanya Technology outlined its guidance for the upcoming quarters. The company anticipates increasing bit shipments by over 20% in 2025, driven by the conversion of DDR3 and DDR4 production to DDR5. It expects a market recovery in the second half of 2025, focusing on AI-driven demand while managing operating costs and capital expenditures to improve cash flow.
In conclusion, Nanya Technology’s earnings call presented a cautious yet optimistic outlook for the future. While the company achieved revenue growth and made strategic advancements, it faces ongoing financial and operational challenges. The forward-looking guidance suggests a focus on leveraging AI demand and improving financial stability, which will be crucial for its future success.
