Topco Technologies Corp (崇越電通), a distributor of silicone products that are mainly manufactured by Shin-Etsu Chemical Co, has a conservative outlook for this quarter, as clients so far this year have mostly been placing small-volume rush orders and inventory adjustments are expected to extend from last quarter.
However, the company said that its outlook is more positive for the second half of this year, when sales of silicone products used in smartwatches, servers and heat dissipation items are expected to increase.
Shin-Etsu plans to raise its output in the third quarter, so more shipments from the Japanese firm are likely in the second half of the year, Topco said on May 9.
The company said it would continue to expand its customer base in the automobile, medical and cosmetic segments to diversify its product portfolio and counter fluctuations in sales.
The company’s remarks came after it reported disappointing first-quarter results due to customers’ inventory adjustments and a high comparison base set last year.
Net profit dropped 26.57 percent to NT$80.19 million (US$2.56 million) for the first quarter from NT$109.2 million in the same period last year, or earnings per share of NT$1.76 from NT$1.11.
Gross margin fell annually from 19.81 percent to 17.64 percent and revenue declined 15.70 percent to NT$1.73 billion, which Topco Technologies blamed on silicone prices, which have been falling since the fourth quarter of last year.
Topco Technologies’ earnings per share were diluted after it increased paid-in capital in January by NT$60 million to NT$740.61 million by issuing one million new shares, the company said.
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