Makalot Industrial Co (聚陽實業), an apparel supplier for global fashion brands including H&M and Zara, expects its revenue to to hit a record high this year after growing 15 percent from last year on the back of rising sales and average selling prices.
Last year, the company’s revenue increased 4.96 percent to NT$15.87 billion (US$532.3 million) from 2011.
“The company’s revenue in the second half of this year will be slightly higher than in the first half,” chairman Frank Chou (周理平) said on the sidelines of a shareholders’ meeting yesterday. “However, sales for the whole of this year could grow by 15 percent to 20 percent compared with the previous year.”
The average selling prices of the company’s products are estimated to rise 2 to 3 percent year-on-year in the second half because Makalot has secured orders for high value-added products, Chou said.
However, average selling prices for the whole of this year will still be 2 percent lower this year than they were a year ago, he said.
Chou’s forecasts were in line with the prediction made by Fubon Securities Investment Services Co (富邦投顧) analyst Kerry Wu (吳致勤) last week. Kerry forecast that Makalot’s revenue may grow 20 percent to NT$18.84 billion this year due to increased shipments and rebounding selling prices.
“Shipments to the company’s top three clients, who together make up 60 percent of [Makalot’s total] sales, are expected to grow 20 percent this year,” Wu said on Thursday last week. “Shipments to a Japanese client will also be ramped up this year, with sales weight rising from less than 1 percent to 6 percent.”
By February next year, the company’s production capacity will increase by 20 percent from 11 million dozen garments a year to 13 million dozen, after the completion of two new factories in Semarang, Indonesia, Chou said.
The company’s expansion in Cambodia and northern Vietnam is also to be completed by the end of the year, he added.
Makalot also plans to increase its profit margin by manufacturing more functional clothing, after seeing the success of a new series of functional garments at 7-Eleven convenience stores.
The company has set up a subsidiary dedicated to developing functional clothing, Chou said, adding that it expects the subsidiary’s revenue to increase to NT$1.5 billion by 2016 from NT$600 million last year.
Chou also briefed shareholders on the latest developments in the company’s new clothing brand, Fisso, which was launched earlier this year and is likely to stay in the red for another three years, he said.
Shareholders yesterday approved the company’s proposal to distribute a cash dividend of NT$6.2, based on last year’s earnings of NT$1.18 billion, or NT$7.17 per share. The dividend yield was 4.28 percent based on Makalto stock’s NT$145 closing price yesterday, up 1.4 percent from Tuesday.