Topco Technologies Corp (崇越電通), a distributor of silicone products that are mainly manufactured by Japan’s Shin-Etsu Chemical Co, yesterday said that its board of directors has approved the distribution of a cash dividend of NT$3.6 per share, as net profit last year dipped due to weak pricing.
The cash dividend is less than the NT$5.1 per share the company paid last year.
This year’s distribution represents a payout ratio of about 70 percent, down from an average of 80 percent seen over the past few years, Topco said.
The firm said in a statement that it needs to reserve more cash, considering the potential effects of a COVID-19 epidemic on the global economy, which has added uncertainty regarding market conditions.
Net profit last year slumped 18.9 percent to NT$375.8 million (US$12.49 million), from NT$463.24 million in 2018, while earnings per share dropped from NT$7.41 to NT$5.1, Topco said.
Revenue fell 9 percent to NT$7.77 billion, from NT$8.54 billion a year earlier, while gross margin sank from 19.2 percent to 17 percent.
The firm attributed its weak revenue and earnings last year to price declines and a US-China trade spat.
As the effect of the US-China trade dispute on the global economy is diminishing and market demand for silicone products is recovering, which is helping to boost prices and stabilize the supply and demand situation, Topco said.
However, there are downside risks, as the company is concerned that the recovery could be weighed down by the COVID-19 epidemic, it said.
The virus poses a threat to the global economy and China particularly, the company said.
As there is greater uncertainty regarding the global market, the company is closely monitoring the situation and would take steps to cope with any changes, it added.
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