Taiwanese bicycle maker Giant Manufacturing Co (巨大機械) yesterday reported annual declines in net profit and revenue in the first quarter of this year, due to the company’s lower production capacity and inventory adjustments at distribution channels.
Net profit fell 54.14 percent year-on-year to NT$835.81 million (US$27.2 million) in the first quarter and consolidated revenue declined 9.62 percent to NT$20.12 billion, the company said in a statement.
Earnings per share were NT$2.13, down from NT$4.86 a year earlier.
Photo: I-Hwa Cheng, Bloomberg
The company’s operating profit fell to NT$1.69 billion in the first quarter, from NT$2.33 billion a year earlier, as macroeconomic headwinds and higher inventory levels adversely affected its factory utilization, while foreign exchange losses of NT$82 million and higher interest expenses due to rising interest rates also seriously hit its non-operating income, Giant said.
The company reported a non-operating loss of NT$164.94 million last quarter, compared with a non-operating gain of NT$271.32 million a year earlier.
Gross margin slid to 21.89 percent last quarter, from 22.91 percent the previous year, and operating margin also dropped from 10.45 percent to 8.4 percent over the period, company data showed.
Last quarter, the company’s bicycle shipments dropped annually by a high single-digit percentage in Europe and a double-digit percentage in the US, while electric bicycle shipments retained stable growth momentum, accounting for 32 percent of its total revenue in the quarter, Giant said.
On a positive note, sales in China increased 50 percent from a year earlier as consumption is recovering after COVID-19, Giant said.
There is also an increase in demand for mid to high-end products there amid improved public health awareness among Chinese, the company added.
Despite this being a challenging year for the bicycle industry, Giant said consumer demand for bicycles would remain solid in the long term, with growth in e-bikes continuing after the economy improves.
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