Sat, Sep 15, 2018 - Page 12 News List

Makalot profit disappoints at the start of Q3: Jih Sun

By Lisa Wang  /  Staff reporter

Makalot Industrial Co (聚陽), a manufacturer of ready-to-wear apparel and functional clothing, yesterday saw its shares slip 0.99 percent after reporting a weaker-than-expected operating profit for last month.

Operating profits contracted 17.53 percent to NT$179.42 million (US$5.83 million), compared with NT$217.56 million in July, the company said in a Thursday filing with the Taiwan Stock Exchange.

The figures “fell short of our expectations,” Jih Sun Securities Investment Consulting Co (日盛投顧) analyst Channie Wang (王章妮) said in a research note yesterday.

Last month’s operating profits were only 26.8 percent of Jih Sun’s estimate for all of the third quarter, Wang said.

Combining July and last month, Makalot’s operating profits totaled NT$397 million, achieving 59.4 percent, rather than 60 percent, of Jih Sun’s estimate for the quarter, she said.

Makalot’s pretax profits contracted 14.21 percent sequentially to NT$196.84 million last month, from NT$229.45 million in July, but grew 15.56 percent from NT$170.33 million a year earlier, company filings showed.

The results matched Jih Sun’s expectations, due to non-operating income of NT$17.42 million, Wang said.

In the first eight months of the year, Makalot’s pretax profit increased 10.39 percent to NT$1.15 billion, from NT$1.04 billion in the same period last year, making for pretax earnings per share of NT$5.5, up from NT$5.03.

Over the same period, cumulative revenue edged up 0.67 percent to NT$14.69 billion from NT$14.589 billion, the company said.

Makalot’s annual capacity reaches 14.2 million dozen, with production bases and business locations spread across Indonesia, Vietnam, Cambodia, China and the Philippines.

Its major clients include GAP Inc, Kohl’s Corp, Uniqlo owner Fast Retailing Co and Target Corp.

The company should see a rebound in revenues and profits this month due to seasonal factors, Wang said.

“September is usually the peak month for Makalot. Besides, winter apparel usually makes for higher gross margins,” Wang said. “The company will see growth momentum build up gradually.”

Wang forecast that Makalot would post NT$1.5 billion in net profit this year, up about 16 percent from NT$1.29 billion last year and translating to earnings per share of NT$7.18 this year, up from NT$6.18 last year.

Revenue would expand at an annual pace of 7.28 percent to NT$24.01 billion this year from NT$22.38 billion, she said.

Makalot shares closed at NT$150.5 in Taipei trading yesterday. They have gained 20.4 percent in the year to date.

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