Acer sees currency challenges

Acer sees currency challenges

SINGAPORE (Reuter): Acer Computer International Ltd said yesterday the turmoil in Southeast Asian currencies would pose additional challenges for the group.

"We are not sure we can maintain revenue growth at the same rate as the first half, but our growth should outstrip industry growth," William Lu, Acer's chairman and chief executive officer told reporters at a news conference to announce interim results.

He said Asia Pacific's information technology industry grew 14 percent in the first half.

Acer's revenue jumped 49.4 percent to Singapore $763.6 million in the first half of 1997 to June 30, while net profit rose 21 percent to S$17.8 million. Its performance was in line with analyst expectations.

"The foreign exchange turmoil will make the import of computers more expensive and there will also be foreign exchange risks for the company," Lu said.

However, Lu said he still expected strong Christmas sales in Southeast Asia.

He declined to say whether Acer would be able to meet the analyst consensus forecast of S$38.6 million in net profit for the full year.

He said the outlook for the second half of 1997 was strong.

Lu added that Acer did undertake hedging activities for its foreign exchange exposures, but it was not worth hedging in Thailand as it was too expensive.

Thailand is one of Acer's major markets in the region and posted revenue growth of 39 percent in the first half.

On the growing industry trend towards direct selling, Lu said Acer did not intend to go that route like Dell [DELL.O] and Gateway 2000 [GTW.N].

"Acer's position is to stay with channel distributors. We feel it is not necessary to go direct," Lu said.

Acer has a network of more than 10,000 dealers.