Textile and garment manufacturer Eclat Textile Co (儒鴻) yesterday posted net profit of NT$271.2 million (US$8.96 million) for the first quarter, a year-on-year decline of 58.5 percent, which it attributed to sluggish demand and mounting foreign-exchange losses.
The firm’s earnings per share (EPS) sank to NT$1.01 in the quarter, their lowest level since the second quarter of 2011, and a sharp fall from the first quarter of last year’s NT$2.47, the firm’s filings with the Taiwan Stock Exchange showed.
“A foreign-exchange loss of nearly NT$450 million eroded the company’s profitability last quarter as the New Taiwan dollar strengthened against the US dollar,” vice president Roger Lo (羅仁傑) said by telephone yesterday.
In the first three months of this year, Eclat’s revenue dropped 7.9 percent year-on-year to NT$5.15 billion.
The company attributed the contraction to prolonged weakness in the global garment industry.
Eclat counts major global brands such as Nike Inc, Lululemon Athletica Inc and Under Armour Inc among its top clients, company data showed.
Revenues should pick up in the second half as the apparel industry is near to entering its high season based on the company’s order visibility, Lo said.
Apart from improving customer demand, the company said its ongoing capacity expansion would stimulate sales in coming quarters.
VIETNAM LINES
Eclat plans to add several production lines to its two Vietnamese plants next quarter, which it said would help boost its total production capacity to 7.5 million garments per month from the present 6.2 million units, the company said.
Eclat shares yesterday closed at NT$321 in Taipei trading.
They have fallen 5.14 percent since the beginning of the year, significantly underperforming the broader market’s nearly 7.2 percent increase over the same period, Taiwan Stock Exchange data showed.
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