 2011-05-06 |
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Reporter He Mei-Ru, Taipei
Packaging giant YC (4306) has released its Q1 financial report, showing a consolidated net profit after tax of NT$207 million, representing a 28% year-over-year increase, with earnings per share (EPS) of NT$0.75. Looking ahead to Q2, the company indicated that with signs of a strengthening U.S. dollar and a decline in international crude oil prices, raw material costs may decrease. However, demand for BOPP films remains strong, and the electricity rationing policies in mainland China in June could further boost prices, leading to profit margins expected to exceed those of Q1, with both revenue and profits anticipated to grow compared to the previous quarter.
In Q1, YC's consolidated revenue reached NT$4.334 billion, a 28% increase year-over-year. The gross margin stood at 14.29%, down approximately 3 percentage points from last year's 17.49%. The consolidated operating profit was NT$300 million, up 27.6% from the same period last year. The pre-tax profit was NT$297 million, with a post-tax net profit of NT$207 million, showing year-over-year increases of 4.2% and 28%, respectively, while EPS improved from NT$0.61 in the previous year.
The recent sharp drop in international crude oil prices and indications of a stronger U.S. dollar have led the company to believe that raw material prices will undergo a short-term correction in Q2. With tight supply of tape materials on both sides of the Taiwan Strait and strong demand for BOPP films, the summer electricity rationing policies in China are expected to impact market supply, likely driving product prices upward. Although YC's BOPP production capacity in mainland China is also affected by the film limitations, the anticipated price increases should offset any declines in volume. |
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