Uni-President Enterprises Corp (UPE, 統一企業), the nation’s largest food and beverage conglomerate, on Wednesday reported that net profit for last year surged 174.3 percent year-on-year to NT$39.85 billion (US$1.37 billion), although consolidated revenue dropped 3.27 percent to NT$399.86 billion.
The Tainan-based company reported earnings per share at NT$7.01 for last year, higher than Yuanta Securities Investment Consulting Co’s (元大投顧) estimate of NT$3.09 and Taishin Securities Investment Advisory Co’s (台新投顧) forecast of NT$6.9.
Analysts said the sharp increase in profit was mainly helped by one-off disposal gains from its sale of a 20 percent stake in President Starbucks Coffee Shanghai Corp (上海統一星巴克) to US coffee giant Starbucks Corp.
In the fourth quarter of last year alone, net profit grew significantly to NT$25 billion, from NT$1.3 billion a year earlier, reflecting the the one-off disposal gains, they said.
The firm’s better-than-expected profitability last year was also due to higher contribution from two subsidiaries: President Chain Store Corp (PCSC, 統一超商) and Uni-President China Holdings Ltd (UPC, 統一中國控股), which are 45.4 percent and 70.5 percent owned by UPE respectively.
The earnings contribution from PCSC reached about NT$14.08 billion, while that from UPC amounted to NT$2.85 billion, which helped offset earnings declines at the group’s drugmaking subsidiary, ScinoPharm Taiwan Ltd (台灣神隆), and Ton Yi Industrial Corp (統一實業), a tin plate and tin can unit, analysts said.
“We expect UPC to become the main earnings driver for Uni-President Enterprises, given its clear new product road map with room for margin improvement, backed by high-end product focus and continuing operation optimization,” Yuanta analyst Juliette Liu (劉珮昀) said in a note yesterday.
“PCSC remains a positive earnings contributor, supported by 7-Eleven stores in Taiwan and the Philippines, despite the loss of Shanghai Starbucks,” she said.
UPE chairman Alex Lo (羅智先) yesterday told reporters ahead of an investors’ conference in Taipei that the company plans to focus on the production, marketing and trading of so-called “fast-moving consumer goods” in the food and daily household segment amid fierce market competition, the Chinese-language online news provider Cnyes.com reported.
Lo said he is still optimistic about the company’s growth momentum this year, despite investors’ concerns over lost sales and profit contribution from President Starbucks Coffee Shanghai.
UPE’s combined revenue in the first two months of the year totaled NT$68.41 billion, rising 8.24 percent from the same period last year.
The company’s shares yesterday closed 0.44 percent up at NT$68.3 in Taipei trading.
On Wednesday, the company’s board approved a cash dividend of NT$5.5, suggesting an 8.05 percent dividend yield.
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