Wed, Aug 09, 2017 - Page 12 News List

Eclat expects high-end products to lift revenue next year

TEXTILES:In addition to revenue from high-priced goods next year, Eclat anticipates a solid boost from its five new brand customers this year

By Kuo Chia-erh  /  Staff reporter

Textile and garment manufacturer Eclat Textile Co (儒鴻) expects revenue to grow 15 percent annually next year, thanks to an increasing revenue contribution from higher-priced products.

“We expect revenue generated by high-priced goods — such as computerized jacquard products and functional fabrics — to contribute 60 percent of the company’s total sales next year, compared with nearly 50 percent in the fourth quarter,” company chairman Hung Chen-hai (洪鎮海) said at an investors’ conference in Taipei yesterday.

Average selling prices (ASP) of those products are expected to grow by between 10 percent and 25 percent in the coming year, bolstered by rising customer demand, he added.

“Thus, we forecast an upward trend in Eclat’s ASP,” Hung said, but he declined to disclose this year’s ASP and production volume for the company’s major product lines.

Eclat, which distributes products to Nike Inc and Under Armour Inc, also anticipates a significant revenue contribution from its five new brand customers this year. The five new customers are expected to contribute 12 percent of the company’s total sales next year, compared with nearly 9 percent by the end of the year, the firm said.

To satisfy customer demand, Eclat is to add 90 production lines to one of its Vietnamese plants this quarter, which would help boost its total production capacity at the plant by 1 million garments per month, the firm said.

The garment maker said it is also considering tapping into the yarn market, aiming to cement its position in the industry by developing a vertically integrated supply chain.

It is considering building a plant in the next few quarters to produce yarn, it said.

The company on Monday reported a net profit of NT$789.9 million (US$26.2 million) for last quarter, almost triple the NT$271 million it posted in the first quarter.

However, the figure translated into a 1.5 percent decrease from NT$801 million a year earlier, which the company attributed to a strong New Taiwan dollar and higher operating expenses for its ongoing expansion projects.

Earnings per share were NT$2.95 in the second quarter, down from NT$3.04 a year earlier, company data showed.

Gross margin fell to 26.62 percent last quarter from 28.15 percent a year ago, the lowest level in the past 11 quarters, a company filing said.

“The New Taiwan dollar sharply appreciated 5.7 percent in the second quarter, which weighed on Eclat’s margin performance,” vice president Roger Lo (羅仁傑) told investors yesterday.

In the first half, aggregate net profit totaled NT$1.06 billion, or earning per share of NT$4.01, representing a 27 percent decline from the previous year.

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