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.