O-Ta Precision Industry Co (大田精密), which makes golf club heads and putters, on Thursday said it made a turnaround last year and announced plans to cut its capitalization by 30.89 percent to adjust its capital structure.
Net profit reached NT$657.48 million (US$22.58 million) last year, compared with a net loss of NT$222.25 million the previous year, the company said.
Thanks to one-off disposal gains from selling its operations in Shenzhen, China, in the third quarter of last year, the company’s full-year earnings per share reached NT$8.74, improving from net losses per share of NT$1.83 in 2016.
The Pingtung County-based company said its board has proposed a cash dividend of NT$3.40 per common share and plans to cut its capitalization from NT$1.21 billion to NT$838 million to enhance shareholder value.
If the plans are approved by shareholders and regulators at an annual shareholders’ meeting on May 11, the company said it would set a timeframe for the capital reduction and return NT$3.09 per share to shareholders.
O-Ta Precision has operations in Taiwan and China. The golf business’ profit has been negatively affected by higher labor costs and fierce competition from rivals over the past few years, despite relocating its China operations from Shenzhen to Ganzhou in the second half of last year and increasing in manufacturing automation to help reduce operational costs.
The firm said it is positive about this year’s market demand amid a recovery in the world economy, expecting the golf industry to grow at a compounded average growth rate (CAGR) of about 3 percent from 2015 to next year, citing estimates by California-based market research firm Frost & Sullivan.
The Greater China region is forecast to outperform the global market and grow by a CAGR of 8.3 percent over the same period, the company added.
Shares of O-Ta Precision fell 3.87 percent to close at NT$42.2 in Taipei trading yesterday.
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