 2015-08-16 |
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YC Group (4306-TW), Taiwan's leading tape manufacturer, has released its financial report for the second quarter. Thanks to a slight rise in oil prices and the contribution of non-operating income from the sale of land and buildings in Linkou, the company turned a profit from its first-quarter losses, earning NT$0.69 per share. However, its subsidiary Achem (1715-TW) saw its post-tax earnings per share decrease by 52% to NT$0.08, primarily due to the downturn in domestic demand in China.
In Q2, YC's consolidated revenue reached NT$4.62 billion, up 13.8% from the previous quarter, with consolidated post-tax net income of NT$350 million, turning a profit with NT$0.69 earnings per share. The increase was largely due to the slight rise in oil prices and non-operating income from the sale of land and buildings in Linkou. For the first half of the year, YC's earnings per share totaled NT$0.44.
Achem's Q2 consolidated revenue reached NT$2.68 billion, up 8.9% from the previous quarter, but its consolidated post-tax net income was only NT$30 million, a 50% decrease, resulting in earnings of NT$0.08 per share for the quarter. The decline was mainly attributed to weak domestic demand in China, as well as continued losses at Achem’s petrochemical operations and Ningbo plant. For the first half of the year, Achem’s earnings per share amounted to NT$0.25.
Looking ahead, YC expects that international oil prices will remain low, and the ongoing losses at Achem's petrochemical operations will continue to impact the group. The oversupply in China's film market also poses challenges to YC's operations. However, YC's XinZhuang project, 'Wangzhou MORE,' is set to begin recognizing revenue from property deliveries in the second half of the year, which is expected to stabilize revenue and profit.
YC acknowledged that Achem is facing significant challenges due to weak economic conditions in China, leading to cautious order placement by end-users. In addition, the stock market crash in China has raised concerns about a potential ripple effect, prompting the company to adopt a more conservative approach to accounts receivable and shipments. Overall, YC expects a challenging second half of the year for its operations. |
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