 2015-01-12 |
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ACHEM and Xinzhou Global See Revenue Growth, YC Struggles with Falling Oil Prices Impacting Film Business
【Reporter Zhao Xiaohui, Taipei】
The adhesive tape leader YC Group (4306-TW) has announced its consolidated revenue for last year (2014). Its subsidiaries, ACHEM (1715-TW) and Xinzhou Global (3171-TW), have seen revenue growth of 4.44% and 9.88% year-over-year, respectively. However, YC has been impacted by falling international oil prices, which has pressured its film business and led to a revenue growth rate of just 1.89%, the lowest among its peers.
In December, YC reported consolidated revenue of NT$1.64 billion, up 1.5% from the previous month. For the year, total revenue was NT$19.99 billion, reflecting a 1.89% increase year-over-year.
YC noted that the persistent low oil prices pose a risk of further decline, which affects the performance of its film business. Additionally, the company's construction business could not recognize revenue due to adjustments in IFRS accounting principles, leading to less-than-ideal performance results for 2014.
ACHEM’s consolidated revenue in December rebounded to NT$950 million, up 7.34% month-over-month. This recovery is attributed to the gradual resumption of production at its Ningbo plant's OPP production line, stability in the Chinese OPP market, and recovery in export markets in the U.S. and Japan, alongside a depreciating NT dollar.
Despite market fluctuations in China, ACHEM’s 2014 revenue was NT$10.98 billion, a 4.44% increase year-over-year, thanks to stable growth in orders from the Americas and Asia (excluding China) and the shipment of new products.
Xinzhou Global, which produces downstream packaging materials and operates the "Bao Dashi" channel, saw December revenue reach NT$159 million, a 4.1% decrease month-over-month. However, its 2014 total revenue was NT$1.78 billion, a 9.88% increase year-over-year.
YC noted that after integrating its packaging materials business, Xinzhou Global showed operational benefits in Taiwan, and the "Bao Dashi" operations in China have demonstrated gradual growth and monthly profitability.
Looking ahead to 2015, YC acknowledges that while facing sluggish demand in the Chinese market and intense industry competition, the benefits of vertical integration from the new Yangmei PE plant and the Haian plant in China will gradually become evident, potentially leading to a recovery in overall operations. For Xinzhou Global, expansion will continue in Taiwan and China, focusing on the Central and Northern China markets.
As for YC itself, while it stands to benefit from the growth of its two subsidiaries, the ongoing drop in oil prices poses significant pressure on its film business, presenting challenges for future revenue and profit growth. |
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