Thu, Mar 16, 2017 - Page 12 News List

Tong Yang hit by foreign-exchange losses and increased materials costs

By Kuo Chia-erh  /  Staff reporter

Tong Yang Industry Co (東陽實業), which supplies automotive metal sheets and bumpers to global brands, yesterday said that pre-tax profit decreased 11 percent annually to NT$144 million (US$4.67 million) last month, due to foreign-exchange losses and increasing materials costs.

Aggregate pre-tax income in the first two months of the year dropped 34 percent to NT$345 million, or earnings per share of NT$0.55, data showed.

CLIMBING COSTS

The company attributed the decline in earnings to a NT$98.96 million foreign-exchange loss last month, mainly because of the appreciation of the New Taiwan dollar against the US dollar, Tong Yang said in a statement.

“We also noticed that materials costs have been climbing since the fourth quarter of last year,” a Tong Yang’s investor relations official said by telephone, citing soaring prices of plastics and sheet metal.

However, international customer demand remains robust this year, she added.

The auto parts maker posted sales of NT$1.88 billion for last month, a 19 percent increase from the previous year, with aggregate revenue up 2.41 percent to NT$3.8 billion in the first two months of the year.

TRIAL PRODUCTION

Commenting on sales outlook, the official said that the company’s ongoing capacity expansion plans are to bear fruit in the first half of this year, which would help boost Tong Yang’s sales further.

Last month, a new production line for making electronic plating products began trial production at the company’s Tainan plant, with an annual capacity target of 480,000 units.

Several production lines, construction of which was completed during the second half of last year, are expected to make Tong Yang’s injection molding factory able to produce 120,000 additional bumpers per month this year, the company said.

The company had obtained certification for its post-sales car parts from China’s second-largest property insurance company, Ping An Insurance (Group) Co (平安產險), which should help it obtain orders from Chinese car insurance companies.

Tong Yang’s brand customers include General Motors Co, Fiat Chrysler Automobiles NV and Changan Automobile (長安汽車).

In the first three quarters of last year, the company saw its net profits grow 14.5 percent from NT$485 million a year earlier to NT$554 million, or NT$0.94 earnings per share, data showed.

The company has not yet released its audited earnings results for last quarter.

Shares of Tong Yang yesterday rose 1.56 percent to close at NT$58.6 in Taipei trading after the announcement, beating the benchmark TAIEX, which dropped 0.04 percent.

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