Sat, Oct 12, 2013 - Page 13 News List

Kenda Rubber posts monthly dip

By Camaron Kao  /  Staff reporter

Tire manufacturer Kenda Rubber Industrial Co (建大輪胎) reported a revenue decline of 3.89 percent to NT$2.4 billion (US$81.86 million) last month from August, due to lower sales in Europe and the US.

The figure was 0.19 percent higher than NT$2.39 billion a year ago, according to filing to the Taiwan Stock Exchange.

The company’s sales to the US last month posted a 5 percent to 7 percent month-on-month decline, while sales to Europe dropped more than 7 percent from a month ago, an official of Kenda, who declined to be named, said by telephone.

Sales to the US account for 25 percent of the company’s revenue, while sales to Europe are around 10 percent, the official said.

CHINA OFFSET

The monthly sales decline across consecutive months in the on the two continents was partly offset by the 5 percent sales increase in China last month, the official said.

The official added that sales to China account for 35 percent of the company’s revenue.

The official said sales in the US and Europe may pick up again this month as companies in the on the two continents increase purchases of bicycle tires to prepare for Christmas, when, according to the company, people buy bicycles as presents.

Last quarter, Kenda posted revenue of NT$7.38 billion, down 1.52 percent year-on-year and 6.54 percent quarter-on-quarter, the filing said.

The official said the year-on-year revenue decline was because of low market sentiment in the US and Europe, while the quarter-on-quarter revenue drop was due to the appreciation of New Taiwan dollar.

Meanwhile, rival Cheng Shin Rubber Industry Co (正新橡膠) reported a revenue decline of 0.91 percent to NT$35 billion last quarter from NT$35.33 billion for the previous quarter.

Quarterly revenue was 5.72 percent higher than the previous year, the company said in a separate filing.

“The market sentiment in the US and Europe has been low since the beginning of this year,” Cheng Shin’s vice president Wu Hsuan-miao (吳軒妙) said.

Wu said Cheng Shin’s year-on-year revenue increase was as a result of its capital expansion and relatively lower exposure in both Europe and the US.

CHINA BUFFER

Sales to the US and Europe were around 10 percent of Cheng Shin’s revenue, while sales to China account for 50 percent, Wu said.

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