Wei Chuan Foods Corp (味全食品) yesterday said that its domestic business is expected to improve in the third quarter as it is peak season for cold beverage sales, after it posted net losses of NT$27 million (US$868,139) in the first quarter.
“To improve net income, we have since last month decreased the number of promotional activities and adjusted the price of our Lin Feng Ying (林鳳營) milk back to normal,” Wei Chuan president Chang Chiao-hua (張教華) told the company’s annual shareholders’ meeting in Taipei.
Chang reassumed his post in January after the removal of Michael Su (蘇守斌) as chief executive officer.
In 2015, Chang retired as president amid charges of fraud, forgery and food-related regulatory violations related to Ting Hsin Oil and Fat Industrial Co (頂新製油實業), and was acquitted in 2016. Ting Hsin Oil and Fat made cooking oils marketed under the Wei Chuan brand.
Wei Chuan has stabilized its domestic business in the past few years through various promotional and marketing activities, and by disposing of assets in Taoyuan and New Taipei City for total gains of about NT$2.3 billion, which has helped cut its debt by NT$13.6 billion since last year, it said.
The company’s core business last year turned a profit of NT$100 million, compared with losses of NT$200 million in 2017, it said.
Outgoing chairman Chen Yung-ching (陳永清) told reporters that the Wei Chuan Dragons’ rejoining the Chinese Professional Baseball League (CPBL) this year could also promote the company’s corporate image in the long run.
To ease shareholder concerns about the additional financial burden posed by the team, Chen said that Ting Hsin Group (頂新集團) is the major investor, while Wei Chuan has authorized the use of its logo.
Chen was to retire and step down as chairman after a new board was elected yesterday following the annual general meeting.
Six directors and three independent directors were elected to the new board, while Chen Hung-yu (陳宏裕), former president of OK Mart Co (OK超商), was elected as chairman, Wei Chuan said in a filing with the Taiwan Stock Exchange.
Chen Yung-ching said that the company is “cautiously optimistic” about its business outlook for this year, as sales and profits improved annually in the first five months, while raw material and marketing expenses rose in China.
China operations account for about 63 percent of the company’s total sales, compared with Taiwan’s 37 percent, the company said.
The company said it plans to develop new products such as coffee and lactic acid beverages to maintain sales and profit growth this year.
Shareholders approved the company’s plan to distribute a cash dividend of NT$0.8 per share, which translates to a payout ratio of 41.24 percent based on last year’s earnings per share of NT$1.94. The last time the company distributed a cash dividend was in 2014.
The company has agreed to distribute at least half of its earnings as dividends in a bid to reward shareholders’ commitment to the company.
Wei Chuan shares yesterday closed at NT$34.95 in Taipei trading, down 2.65 percent from the previous session.
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