 2015-05-20 |
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Plastic Stocks: YC Posts Loss in Q1, Aims for Rebound in Q2
May 18, 2015, 11:18 AM, Reporter Wang Yixin, Taipei
Taiwan's leading tape manufacturer, YC (4306), reported a consolidated revenue of NT$40.59 billion for Q1 2015, with a net loss after tax of NT$1.28 billion, resulting in an EPS loss of NT$0.25. Meanwhile, its subsidiary ACHEM (1715) recorded a consolidated revenue of NT$24.63 billion, with a net profit after tax of NT$0.66 billion and an EPS of NT$0.17.
YC attributed its first-quarter loss to a significant drop in oil prices since the second half of 2014, coupled with an oversupply in the Chinese film market, which led to a substantial decrease in prices and considerable losses from falling raw material costs. However, with oil prices stabilizing and increasing market demand starting in Q2 2015, the company expects a rebound. Additionally, profits from the sale of land in Linkou will be recognized, helping to turn losses into profits.
Looking forward, YC anticipates overall operations to improve due to the stabilization of oil prices, the expansion of new export customers, and increased product applications and sales. In the construction segment, the New Taipei City project, Wangzhou MORE, is expected to begin recognizing revenue in Q4 2015, and the Wangzhou Jipin project is already showing strong sales, with expected revenue recognition in the second half of next year. These factors are expected to gradually improve YC’s revenue and profitability.
ACHEM’s Q1 consolidated revenue decreased by 9% year-on-year due to lower oil prices and reduced product prices. However, the decline in raw material costs, increased OPP export orders, and higher sales of PVC tapes (automotive and protective types) led to a 3% increase in gross margin and over 20% growth in operating profit compared to the previous year. The net profit after tax of NT$0.66 billion for Q1 represents a decline from last year, mainly due to investment losses from the newly acquired Ningbo plant and Wanzhou Petrochemical shares, as well as last year's land sale gains in Linkou.
Looking ahead, ACHEM expects improved performance in Q2 due to the gradual realization of vertical integration benefits and stable export orders. With the completion of international customer certifications for the Ningbo plant and the start of normal shipments, operations are expected to grow compared to Q1. In the second half of the year, ACHEM’s overall performance is anticipated to surpass the first half, driven by increased production capacity at the Haian plant, higher shipments of new products like PE, and improved performance from specialized products. |
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