O-Ta Precision Industry Co Ltd (大田精密), the world’s third-largest maker of heads for golf clubs, expects profit for the second half of the year to grow on the back of increased shipments of high-margin products.
“Orders from our top five customers have increased annually so far this year,” an O-Ta public relations official told the Taipei Times by telephone on Friday.
The official declined to provide growth rates in orders from its top five clients, but said sales and profits this year would be better than expected.
“The growth momentum is expected to continue into the second half of the year,” said the official, who asked to remain anonymous.
The Pingtung County-based company, established in 1988, counts golf clubs as its top revenue source, contributing about 90 percent to overall sales in the first half of the year.
Bicycle frames and stainless steel faucets made up 10 percent of sales in the period, the company said.
O-Ta’s US and Japanese customers, each of which contributed half of the company’s annual sales, have been placing more orders for high-margin products this year, the official said, declining to specify its customers and their exact orders.
As next year’s Tokyo Olympics approaches, O-Ta’s Japanese customers plan to introduce new golf products in the first quarter of next year, which would boost sales next year, he said.
The company’s factory in Shenzhen, China, which makes mainly bicycle frames, is expected to relocate to Huizhou next quarter at the earliest, or early next year at the latest, the official said.
“The reason for the relocation is due to higher operation costs,” he said, adding that the new factory would start operations once it receives approval from the local government and gains certification from its customers.
O-Ta had combined profits for May and last month of NT$114 million (US$3.67 million), compared with net losses of NT$136 million in the same period last year, with earnings per share improving to NT$1.75 from NT$1.32 a year earlier, the company said in a regulatory filing on Wednesday.
The company attributed the improvement to better performance of its core business and higher foreign-exchange gains compared with a year earlier.
Revenue for the second quarter climbed 24.31 percent annually and 31.76 percent quarterly to NT$1.12 billion, the company said.
That saw cumulative revenue for the first half of this year rise 3.08 percent to NT$1.97 billion from NT$1.91 billion a year earlier, it said.
Jih Sun Securities Investment Consulting Co (日盛投顧) is positive about global demand for golf products as the Tokyo Olympics draw near and growth potential in China, expecting the golf industry’s output to grow by about 3.04 percent to US$13.3 billion this year.
Shares of O-Ta Precision rose 0.11 percent to close at NT$46.3 in Taipei trading on Friday. They have surged 151.63 percent since the beginning of the year.
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