 2015-05-18 |
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YC Expected to Turn Profitable in Q2; Optimistic About Group's Future Performance
MoneyDJ News, 2015-05-15 16:53:26 Reporter: News Center
Taiwan's leading tape manufacturer YC Group (4306) announced that for Q1 of this year, its consolidated revenue was NT$40.59 billion, with a net loss of NT$1.28 billion and a loss of NT$0.25 per share. The group’s subsidiary ACHEM (1715) reported Q1 consolidated revenue of NT$24.63 billion, with a net profit of NT$0.66 billion and earnings per share (EPS) of NT$0.17. Another subsidiary, New Chao Global (3171), had Q1 consolidated revenue of NT$3.88 billion, a net profit of NT$0.22 billion (a 40% year-on-year increase), and EPS of NT$0.38.
YC indicated that the Q1 loss was primarily due to a significant drop in crude oil prices since the second half of last year and an oversupply in the Chinese film market, leading to a substantial decrease in prices and considerable losses from falling raw material costs. However, with the start of Q2, crude oil prices have stabilized and are rebounding, boosting market demand. YC expects a turnaround in its overall operations in Q2, aided by the gains from the sale of land in Linkou, which should help the company move from loss to profit.
Looking ahead for the year, YC anticipates that with the stabilization and recovery of oil prices, the expansion of new export markets, and an improved product application and sales mix, profitability will improve. The new Xinzhuang "Wangzhou MORE" project is expected to begin recognizing revenue in Q4, and sales of the Linkou "Wangzhou Premium" project have already exceeded 50%. Revenue recognition for this project is expected to continue into the second half of next year, contributing to improved future revenue and profitability.
YC also mentioned that ACHEM’s Q1 consolidated revenue decreased, mainly due to the drop in crude oil prices and lower product prices. However, a reduction in raw material costs, increased export orders for OPP, and higher shipments of PVC tape led to a 3% rise in gross margin, and operating profit grew more than 20% year-on-year. The company reported a net profit of NT$0.66 billion, a decline from the previous year, primarily due to losses from investments in the newly acquired Ningbo Plant and Wanzhou Petrochemical, as well as last year’s land sale gains.
For ACHEM’s 2015 operations, the company expects improved performance in Q2 due to the gradual realization of vertical integration benefits and stable export orders. With the Ningbo Plant’s major international customer certifications completed and normal shipments commencing, overall operations are anticipated to improve compared to Q1. Furthermore, in the second half of the year, as production at the Hai'an Plant ramps up and new products such as PE increase shipments, ACHEM’s performance is expected to be stronger than in the first half of the year.
Regarding New Chao, although Q1 revenue decreased due to lower product prices from falling raw material costs, increased operational efficiency in Taiwan and improving operations in China resulted in a significant increase in gross margin. This led to a 40% year-on-year growth in net profit for Q1.
Looking ahead for New Chao’s 2015 operations, the company expects stable growth in the Taiwanese packaging market. The expansion into China, including partnerships with large local manufacturers and future sales through online platforms, is projected to result in significant growth in both revenue and profitability for the year. |
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