Fortune Electric Co (華城電機), which makes power transformers, power distribution devices and related products, has secured new orders beyond Taiwan Power Co (Taipower, 台電) as the company focuses on expanding its customer portfolio.
During an interview with the Taipei Times on Friday, Fortune Electric spokesman Ted Hsu (許逸德) said the company had won orders from Grape King Bio Ltd (葡萄王), a supplier of probiotics and mushroom mycelium health foods, to build electricity facilities for a new factory in Taoyuan County’s Pingzhen City (平鎮), as well as electro-mechanical engineering projects for Greater Taichung’s mass rapid transit system, bypass roads and city police department.
Fortune Electric’s orders related to these projects total from about NT$1.5 billion (US$50 million) to NT$2 billion for the next two years, Hsu said.
“These new orders are the result of Fortune Electric’s effort to diversify our client base,” Hsu added.
Taipower is still Fortune Electric’s largest client, accounting for 40 percent of the firm’s total revenue of NT$4.45 billion last year.
From this year through 2018, the company will be responsible for a NT$2 billion project subcontracted by CTCI Corp (中鼎工程) to replace some facilities of Taipower’s old power plants, Hsu said.
He said Taipower is to renovate its coal and fossil fuel power plant in Linkou District (林口), New Taipei City, its gas and fossil fuel power plant in Miaoli County’s Tongsiao Township (通宵) and its gas, coal and fossil fuel power plant in Greater Kaohsiung’s Siaogang District (小港).
CTCI is the engineering procurement company responsible for these projects, and Fortune Electric is to be responsible for replacing large high-voltage power transformers and switches at the three plants, Hsu said, adding that gross margin for these products are the highest among all its products.
However, Taipower’s capital spending is on the decline in recent years due to its rising losses.
The state-run utility has also begun to delegate some of its construction projects to engineering companies, a situation the company said was necessary to maintain growth momentum.
From January through last month, Fortune Electric reported revenue of NT$1.97 billion, down 9.68 percent from NT$2.18 billion a year ago, according to its filing to the Taiwan Stock Exchange.
Hsu said the company would start to post year-on-year revenue increase every month starting this quarter, and that the company’s revenue throughout this year would be higher than a year ago.
The company’s revenue in the second half of a year usually accounts for 60 percent of that year’s revenue, because most projects the company is involved in are contracted out in the middle of the year and conducted in the second half of the year, Hsu said.
The company has yet to release its second-quarter earnings results, but in the first quarter, the company posted profit of NT$37 million, or NT$0.17 per share, which represented an increase of 24.37 percent from NT$29.75 million, or NT$0.05 per share, the previous year, company data showed.
Hsu said the company’s gross margin last quarter posted a sequential decline from 23.42 percent a quarter ago, putting its gross margin in the first half of this year at 18 percent.
However, the company’s profit this year would still be higher than a year earlier, he added.
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