Uni-President Enterprises Corp (統一企業), the nation’s largest food-and-beverage conglomerate, yesterday reported that net profit for the first three months of the year increased 14.3 percent year-on-year and 132.8 percent quarter-on-quarter.
Analysts said the increase in profit was mainly due to higher-than-expected non-operating income as the company’s operating profit was down 4 percent from a year earlier, affected by the declining income at its Chinese subsidiary, Uni-President China Holdings Ltd (UPC, 統一中國控股).
The Greater Tainan-based company, whose President Chain Store Corp (PCSC, 統一超商), Ton Yi Industrial Corp (統一實業) and Uni-President China are its major earnings sources, posted a net profit of NT$4.16 billion (US$137.7 million), or NT$0.81 per share in the first quarter, the company’s quarterly financial report showed.
The results were 26.4 percent higher than market consensus estimates of a net profit of NT$3.29 billion, or NT$0.64 per share, and 35 percent above UBS Securities’ forecasts of NT$3.08 billion or NT$0.6 per share.
The earnings contribution from Ton Yi Industrial increased by 9 percent on increased capacities, while that from President Chain expanded by 47 percent on the back of strong growth from its subsidiaries, UBS analyst Ally Chen (陳玟瑾) said.
That increase helped offset an earnings decline at the group’s drugmaking subsidiary, ScinoPharm Taiwan Ltd (台灣神隆), but Uni-President China’s 25 percent annual decline in net profit to 237 million yuan (US$38.05 million) last quarter may indicate headwinds for the company’s Chinese food-and-beverage business this year, she said.
“The fierce competition in the noodle and beverage sector in China has compressed Uni-President Enterprises’ profitability. The visibility of competition easing is still low,” Chen said in a research report.
The company’s January-to-March revenue totaled NT$108.63 billion, rising 11.4 percent from the previous quarter and 3.8 percent higher than the same period last year, with gross margin of 31.4 percent and operating margin of 5.1 percent.
“Uni-President Enterprises continues to deliver solid earnings growth, although there is still bad sentiment about UPC. This could be offset by strong growth from PCSC,” Taipei-based HSBC Securities analyst Abel Lee (李忠翰) said in his report yesterday.
President Chain, the operator of 7-Eleven convenience stores, remained the key earnings contributor to the parent company in this past quarter, reporting a net profit of NT$2.97 billion, or NT$2.86 per share, up 102 percent quarter-on-quarter and 46.9 percent year-on-year.
HSBC has revised upward its earnings forecast for Uni-President Enterprises by 7.4 percent to NT$2.68 per share this year to take into account the company’s first-quarter results.
Last year, the company reported earnings of NT$2.48 per share, up 29.3 percent from 2012.
Uni-President Enterprises shares closed 0.4 percent up at NT$50.8 in Taipei trading.
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