Chemical solvents maker Shiny Chemical Industrial Co (勝一化工) said that its half-year financial performance mainly reflected the negative impact of the US-China trade dispute, while the outlook for the second half remains challenging.
The dispute has caused companies with operations in China to move elsewhere and weakened demand for chemical solvents in the Chinese market, a public relations official told the Taipei Times by telephone yesterday.
“Chinese companies therefore sold more solvents overseas and generated price pressure on our products, including industrial solvents and chemical raw materials such as methanol and glacial acrylic acid, leading to declines in sales and profit in the first half,” the official said.
Prices of industrial solvents and chemical raw materials hit the bottom in the first half, while those of electronic solvents remained steady, said the official, who asked not to be named.
Cumulative profit in the first half dropped 14.82 percent to NT$386.22 million (US$12.42 million), with earnings per share of NT$2.57, while revenue decreased 10.06 percent to NT$3.5 billion, the company said on Tuesday.
Other firms in the sector generally reported sales declines of more than 10 in the first half, the official said.
Average utilization rate at Shiny Chemical’s five production bases in Taiwan fell to about 75 percent, compared with full capacity a year earlier, he said.
The figure is expected to stay flat in the second half, he added.
Electronic and industrial solvents contributed about 68 percent of sales in the first half, while chemical raw materials accounted for 26 percent, the company said.
“We remain conservative about the second half,” the official said.
“However, we expect sales for this quarter to outpace last quarter, as our business enters the peak season from August to October, under the premise that trade tensions will not worsen in the second half,” he added.
Shiny Chemical counts Taiwan as its major market, accounting for about 69 percent of its total sales in the first half.
The Taiwanese firms returning home have yet to contribute to its business, but the company looks forward to emerging business opportunities next year, the official said.
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