Stainless steel and power cable manufacturer Walsin Lihwa Corp (華新麗華) yesterday said net income plummeted 72.1 percent annually to NT$2.12 billion (US$67.6 million) in the first half of the year, from NT$7.61 billion a year earlier, due to lower asset disposal gains.
Earnings per share fell to NT$0.64 in the first half from NT$2.29 a year earlier, while gross margin dipped to 5.2 percent from 11.76 percent over the same period, a company financial statement showed.
Non-operating income decreased 22.9 percent year-on-year to NT$1.69 billion, from NT$2.2 billion a year earlier, the data showed.
“The decline was partly caused by investment losses of NT$800 million from Powertec Energy Corp (寶德能源),” company finance director Sophi Pan (潘思如) told a conference call in Taipei.
As for the company’s stainless steel business, fierce competition led to lower profits compared with last year, she said.
“Supply has outpaced demand as Chinese companies expanded stainless steel output this year,” Pan said, adding that the company’s competitors have lower raw material costs and receive greater tax benefits.
The company’s stainless steel business moved out of the red last quarter as it improved its product portfolio by increasing output of stainless steel bars and introducing new steel products, she said.
Walsin Lihwa spent NT$1 billion this year on establishing a continuous production process and improving product quality at its plant in Yantai, China, which will mainly manufacture stainless steel billet, Pan said, adding that it is expected to be completed late next year and start contributing to sales in 2021.
As for the company’s real-estate business, its construction project in Najing, China, would start selling and contributing to profits in the second half of the year, she said.
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