Down jacket and outdoor garment maker Quang Viet Enterprise Co (廣越企業) yesterday reported that its revenue last month declined 16.42 percent month-on-month to NT$1.44 billion (US$51.9 million), beating most analysts’ estimates of about a 50 percent slump due to COVID-19 lockdowns in Vietnam.
Production at factories in China and Jordan helped compensate for disruptions at its Vietnamese factories, Quang Viet said.
Vietnamese authorities have asked manufacturers to shut down production lines to contain the spread of COVID-19, the firm said.
Photo: Bui Van Lanh, VNA via AP
“The company originally expected to have explosive shipment growth in the third quarter — a peak season for the industry, but, the recent COVID-19 outbreak in Vietnam has curbed the company’s sales growth since July, and the issue of port congestion just rubs salt into the wound,” the company said in a statement.
The company has extended the shutdown of its factories in Vietnam to Wednesday next week, in compliance with the country’s COVID-19 regulations, it said.
Vietnam is an important manufacturing hub for Quang Viet, accounting for about half of its overall capacity.
With significant backlogs on customer orders, the company expects the fourth quarter to be a peak season, as the COVID-19 restrictions in Vietnam mean that shipments would be postponed to the final quarter of the year.
Customers have not canceled orders, Quang Viet said.
The company amassed NT$8.11 billion in revenue during the first eight months of the year, down 5.71 percent from NT$8.61 billion in the same period last year.
Looking forward, Quang Viet said it has clear order visibility to the first quarter of next year, as customers have shown robust demand.
The company makes down jackets and outdoor apparel for major global sportswear brands, including Adidas AG, Patagonia, Nike Inc and the North Face.
Quang Viet said it expects gross margin for the whole of this year to climb from last year’s 10.55 percent.
It also aims to grow revenue and net profit next year, as most customers have kept their inventories low this year, while high raw material prices would push up the average selling prices of its products.
Quang Viet is not the only company suffering due to COVID-19 restrictions. Garment and fabric supplier Eclat Textile Co (儒鴻企業) saw its revenue plunge 26.5 percent to NT$2.54 billion last month from NT$3.46 billion in July, it said in a filing with the Taiwan Stock Exchange.
That represented growth of 24.7 percent from NT$2.04 billion a year earlier.
Eclat’s revenue from January to last month soared 47.79 percent to NT$24.02 billion from NT$18.25 billion a year earlier, the filing showed.
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