Uni-President’s first-quarter earnings beat expectations

By Chen Cheng-hui  /  Staff reporter

Mon, May 13, 2019 - Page 15

Uni-President Enterprises Corp (統一企業), the nation’s largest food-and-beverage conglomerate, last week reported stronger-than-expected earnings for the first quarter on contributions from subsidiaries and lower taxes.

Consolidated net profit was NT$7.82 billion (US$252.6 million) last quarter, up 19.8 percent from a year earlier. Net profit attributable to the parent company increased 23.08 percent to NT$5.28 billion, with earnings per share of NT$0.93, the highest for the period in the company’s history.

Consolidated revenue rose just 3.35 percent year-on-year to NT$107.8 billion in the first quarter, but operating profit increased 7.16 percent to NT$7.52 billion, aided by improving gross margin that rose from 33.97 percent to 34.42 percent over the period.

Tainan-based Uni-President’s major subsidiaries include Taiwan’s President Chain Store Corp (PCSC, 統一超商) and Ton Yi Industrial Corp (統一實業), as well as the Chinese unit, Uni-President China Holdings Ltd (UPC, 統一中國控股).

The earnings contribution from President Chain Store increased by 15 percent to NT$2.9 billion on lower taxes, and that from Uni-President China expanded by 48 percent to 380.5 million yuan (US$55.76 million) on the back of favorable raw material costs and a lucrative product mix, while Ton Yi saw profit increase by 18 percent annually to NT$128 million on foreign exchange gains, company data showed.

President Chain Store reported flat single-store sales (SSS) growth in the first quarter, but Yuanta Securities Investment Consulting Co (元大投顧) said the unit could see better SSS growth in the second half of this year, supported by an e-commerce recovery and solid sales from fresh food and coffee.

Uni-President China is predicted to see further improvement in gross margin throughout this year on favorable raw material costs and lower value-added taxes, Yuanta said in a note on Thursday.

As Uni-President’s first-quarter profit was mainly driven by Uni-President China, while contribution from other Taiwanese units appear moderate, the company would need to focus on stabilizing its overall operations to return to sustainable growth, Capital Investment Management Corp (群益投顧) said in a separate note on Thursday.