Taiwan's Acer sees profits tumble, announces reshuffle

GMT 14:16 2016 Friday ,25 March

Arab Today, arab today Taiwan's Acer sees profits tumble, announces reshuffle

Visitors walk past the Acer booth during the Computex trade show in Taipei
Taipei - AFP

Taiwan's struggling personal computer maker Acer saw its 2015 earnings plunge by two-thirds as it announced a corporate reshuffle that separates off its new businesses, including cloud services and smart devices.

Full-year net profit came in at Tw$603.7 million ($18.5 million), down 66 percent from a year earlier, while revenue fell 20 percent to Tw$263.78 billion, the company said on Thursday.

Acer revealed in a separate statement that it would form a holding company to manage its new businesses from Friday, which it said would help speed up the "overall company transformation".

"The new structure will address the diverse development needs of IT hardware products versus cloud services, smart devices and e-businesses," Acer said.

It did not give any detail as to whether the reshuffle would mean job losses and the company was not immediately contactable Friday.
Acer -- once the world's second largest PC maker -- has struggled as demand tapered and competition increased from the likes of Apple.

Analysts say the hiving off of its new businesses will pave the way for any future sale of the company's divisions.

"By establishing an investment holding company, Acer will likely sell off or introduce new shareholders to any subsidiary company under the holding structure," Fubon analysts said in a note.

Analysts also say the reshuffle may be part of a succession plan by founder Stan Shih, who returned from retirement for a short stint to salvage the company after it sunk into deep losses.

His son Maverick Shih was appointed Thursday to co-head Acer's build-your-own-cloud (BYOC) service and smart device division.

Still, Fubon says a turnaround for Acer is not happening any time soon as outlook for its core business of selling hardware continues to be bleak.

"None of this affects our negative view on the company's future, given the end of the PC and slowing smartphone growth, and the lack of any significant server business for Acer," it said.

The worldwide PC market contracted 10.4 percent in unit volume in 2015, the worst performance on record, according to market intelligence provider International Data Corporation (IDC).


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