Yieh Phui Enterprise Co Ltd (燁輝), which manufactures coated steel products, expects to swing into the black this year as market sentiment continues to recover from late last year.
The company also hopes it can benefit from a lower New Taiwan dollar to boost its overseas sales this year, which accounted for 66 percent of its total sales of NT$56.5 billion last year.
“The outlook this year remains relatively optimistic,” Yieh Phui told its shareholders in a report released yesterday.
The company is expected to stay profitable this quarter, after reporting a profit of NT$316.38 million last quarter, Yieh Phui president Wu Lin-maw (吳林茂) said, citing a monthly gain of NT$40 million last month from the depreciation of the New Taiwan dollar.
Next quarter will be tougher for the company, but Yieh Phui is likely to see an upturn in the fourth quarter, when most new construction projects take place, Wu said.
Yieh Phui also expects its Chinese subsidiary to continue contributing profit to the parent company this year, with expected asset gains of about NT$20 million in the first half of the year, Wu said.
The company is expanding its production in China and it expects a factory manufacturing steel plates for the automobile market to become operational by the end of next year.
The new factory, in Changshu, Jiangsu Province, will have the capacity to produce 400,000 to 500,000 tonnes of steel plates a year, the company said.
In addition, another expansion project in China, also in Changshu, is scheduled to be completed by 2015, which will help increase the company’s production by 310,000 tonnes a year, Yieh Phui said.
Overall, the company said it expects to produce 1.12 billion tonnes of steel products this year, but it did not provide an earnings forecasts for the whole year after posting the first annual loss, NT$1.06 billion (US$35.32 million), in the company’s history last year.
Consequently, the company has decided not to distribute a dividend this year, a move its shareholders approved at its annual general meeting yesterday.
Yieh Phui shares fell 1.78 percent to close at NT$8.28 yesterday.