Sat, Jan 18, 2020 - Page 12 News List

Tong Yang profit slumps last year

By Chen Cheng-hui  /  Staff reporter

Automotive metal sheet and bumper manufacturer Tong Yang Industry Co’s (東陽實業) pretax profit last year fell to NT$2.397 billion (US$80 million) from NT$2.44 billion in 2018, with earnings per share of NT$4.24, the company said on Wednesday.

The decline in income was due to lower revenue and foreign exchange losses, Tong Yang said in a statement.

Without the impact of foreign-exchange losses, the company’s pretax profit would have increased by 5 percent from a year earlier, the company said.

The New Taiwan dollar has appreciated significantly since October last year, causing the company’s export-oriented aftermarket business to face increased exchange-loss pressure, despite its increase in sales during the traditional peak season, it said.

The NT dollar appreciated 1.33 percent against the US dollar last month and rose as much as 3.02 percent in the final quarter of last year, the central bank’s statistics showed.

The NT dollar remains strong and has moved past NT$30 against the greenback in recent sessions, the data showed.

“The company will concentrate efforts to strengthen its competitiveness this year,” Tong Yang president and chief executive Crispin Wu (吳永祥) said in the statement. “More niche goods such as water-based coating and electroplating products are needed to help the company establish a firm footing in the automotive parts industry.”

Tong Yang supplies bumpers, grilles and fenders to global brands through the aftermarket channel or as an original equipment manufacturer (OEM).

Aftermarket and OEM sales accounted for 73.5 percent and 26.5 percent respectively of its total revenue last year, which declined 6.06 percent year-on-year to NT$21.61 billion.

Aftermarket sales grew 7.51 percent to NT$15.88 billion, from NT$14.77 billion the previous year, while OEM sales fell 30.34 percent from NT$8.24 billion to NT$5.74 billion, company data showed.

Taishin Securities Investment Advisory Co (台新投顧) on Thursday forecast that Tong Yang’s aftermarket sales this year would increase by 5 to 6 percent annually on new products, while OEM sales would increase up to 2 percent year-on-year, thanks to a gradual recovery in China’s auto market and inventory in the distribution channels returning to normal levels as the industry’s demand-supply dynamics are improving.

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