Thu, Sep 14, 2017 - Page 12 News List

Taiwan Paiho profits rise 13.3% yearly

SOUTH BOUND:The company said two plants in Vietnam are scheduled to begin mass production next year to meet demand from the large cluster of shoemakers in the region

By Kuo Chia-erh  /  Staff reporter

Shoelace and elastic band and fastener supplier Taiwan Paiho Ltd (台灣百和) yesterday reported that net profit rose 13.3 percent annually to NT$1.08 billion (US$35.93 million) in the first eight months of the year from NT$949.6 million, mainly driven by rising demand for its four-way stretchable elastic bands.

Sales over the period climbed 10.4 percent year-on-year to NT$7.6 billion from NT$6.9 billion and operating income increased 19.2 percent to NT$1.8 billion, from NT$1.5 billion a year earlier, the company said in a filing with the Taiwan Stock Exchange.

Customer demand for four-way stretchable elastic-knitted shoe uppers has remained strong, supporting sales, Taiwan Paiho vice president Tina Yeh (葉桂珠) said by telephone yesterday.

“We have added 90 new machines to produce four-way stretchable products so far this year to satisfy better-than-expected demand,” she said.

Aided by increased revenue from such high-margin products, its gross margin for this year is likely to reach 41 percent, up from last year’s 39 percent, Taiwan Paiho said.

Asked about capacity expansion, Yeh said the Paiho group as a whole budgeted NT$3 billion for capital spending this year, up from last year’s NT$2 billion.

Two new plants in Vietnam — which would make shoelaces and shoe uppers for customers in the vicinity — are scheduled to begin mass production next year, Taiwan Paiho said.

Yeh said the company would continue investing in Southeast Asian countries over the coming years, citing a cluster for shoemakers in the region.

Another new plant in Indonesia, which began production in the first half of this year, is expected to yield revenue next year.

Paiho yesterday gave a bright business outlook for the rest of the year, due to a seasonal peak in demand, adding that it has secured large exclusive orders from global clients.

The Changhua-headquartered company expects sales to grow between 10 percent and 15 percent this year from last year’s NT$10.6 billion, bolstered by robust customer demand.

Company data showed that Adidas AG and Nike Inc remained Paiho’s two biggest revenue sources in the first half of this year, contributing 26.5 percent and 18 percent respectively.

Paiho shares yesterday gained 1.2 percent to close at NT$126 in Taipei trading, comfortably beating the benchmark TAIEX, which dropped 0.73 percent to 10,532.88 points.

The company has seen its stock rise by more than 25 percent since the beginning of the year, market data showed.

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