Mon, Apr 23, 2018 - Page 15 News List

Fulgent Sun profits drop because of exchange losses

By Chen Cheng-hui  /  Staff reporter

Outdoor footwear supplier Fulgent Sun Group (鈺齊國際) on Wednesday last week reported that its first-quarter profit plunged nearly 63 percent compared with last year, due to unfavorable foreign exchange rates.

Net income attributable to the parent company was NT$98.54 million (US$3.35 million) in the first quarter, or earnings per share (EPS) of NT$0.68, the company said in a statement.

The company’s first-quarter net income was NT$264.74 million last year, or EPS of NT$1.92.

The appreciation of the yuan and New Taiwan dollar resulted in foreign-exchange losses amounting to NT$0.48 per share, but if this factor is excluded, the EPS after tax would be NT$1.16, the Douliu City (斗六), Yunlin County-based company said in the statement.

Fulgent Sun’s operating profit was NT$192.02 million in the first quarter with consolidated revenue of NT$2.16 billion, down from NT$345.71 million and NT$2.36 billion respectively in the same period last year.

The firm said it has continued to reduce reliance on its Chinese plants, with revenue from its Cambodia and Vietnam operations contributing more than 55 percent to its total sales in the first quarter for the first time.

While the fixed cost per unit was higher in the first quarter due to fewer working days, the company’s gross margin improved to 19.5 percent, from 19.2 percent and 15.6 percent in the previous two quarters, it said.

However, due to shipping schedules and customer demands, as well as the NT dollar’s appreciation, the firm saw a significant discrepancy between production and sales last month, Fulgent Sun said.

Despite efforts to lower operating expenses from the previous quarter, its operating expense ratio grew from 8.5 percent to 10.7 percent last quarter, causing its operating margin to fall from 10.7 percent to 8.9 percent, it said.

Fulgent Sun said it aims to continue promoting automation at its production lines and gradually streamline production.

The firm remains committed to a strategy of taking small-volume orders for more products, aiming to maintain its overall order visibility for three to four months and grow its operating income, it said.

Fulgent Sun said that shoe orders for this year’s spring and summer seasons have seen growth and those for the fall and winter seasons are to be shipped this quarter.

The company’s overall operating performance is to improve as it gradually enters peak shipment season, Fulgent Sun said, adding: “Long-term growth momentum is guaranteed.”

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