Textile and apparel companies post profits, all-time highs

  • By Chen Cheng-hui / Staff Reporter

Major textile and apparel makers Eclat Textile Co (儒鴻) and Makalot Industrial Co (聚陽) posted record first-quarter profits last week on higher revenues and improved margins, while the Down jacket and outerwear maker Quang Viet Enterprise Co (廣越) posted a first-quarter profit for the first time, although it is usually a low season.

Eclat reported net profit of 1.79 billion Taiwan dollars ($60.25 million) last quarter, up 31.9 percent year on year, or earnings per share of 6.53 Taiwan dollars, it said. the company in a regulatory filing on Thursday last week.

The increase was supported by higher revenue in the last quarter, which grew 23.8% year-on-year to NT$10.18 billion, while gross margin and operating margin improved year-on-year at 26.8% and 21.6% respectively, according to company data.

Photo courtesy of Eclat Textile Co

Eclat attributed the good performance to the effects of deferred orders and price increases.

The company has seen less pressure from rising commodity costs lately, Eclat Vice Chairman Roger Lo (羅仁傑) told an online investor conference in Taipei yesterday.

Coupled with increases in average selling prices and the depreciation of the New Taiwan dollar against the US dollar, the company’s gross margin is expected to improve further, he said.

For now, inflation and the Russian-Ukrainian war have affected end-market consumption, Lo said. But Nike Inc, one of its client brands, recently revised its guidance for the fourth quarter, indicating that inventory could be well digested, he said.

The company also counts global brands such as Gap Inc, Target Corp, Lululemon Athletica Inc and Under Armor Inc among its main customers.

As Western countries, South Korea, Japan and Singapore are all gearing up to fully coexist with the virus, market demand for new clothes will increase once people can go outside, Lo said, adding that the company is cautiously optimistic about its business prospects in the second half of the year.

Regarding the progress of capacity expansion in Indonesia, Lo said that the first phase of expansion of the garment factory in Indonesia currently has a monthly output of 700,000 pieces, and this figure is expected to increase to 1 million. parts by the end of the year, he said.

The factory’s second phase of expansion is expected to be completed in July and August, with monthly production capacity expected to reach 500,000 to 600,000 pieces in the first quarter of next year and increase to one million pieces in the second quarter, Lo said. .

Eclat plans to start construction of a fabric factory in Indonesia next year, he added.

Makalot’s first-quarter net profit rose 37.4% from a year earlier to NT$893 million, or earnings per share of NT$3.69, the company said in a filing on Thursday. separate.

Its revenue was NT$7.97 billion last quarter, up 16.9 percent from a year earlier, it said.

However, it was robust shipments of high-margin functional apparel, which accounted for 70% of its total shipments, that helped boost net profit in the quarter, said Makalot, whose top customers include Gap, Target, the GU sub-brand of Fast Retailing Co., Kohl’s Corp, Walmart Inc and Hanesbrands Inc.

Makalot’s gross margin was 26.1% and operating margin was 14% last quarter, up 2.5 and 2.3 percentage points respectively from a year earlier, it said. -He specifies.

Meanwhile, Quang Viet posted a net profit of NT$10.03 million for the last quarter, compared to a net loss of NT$108.99 million in the same period last year.

It was rare for the company to post profits in the first quarter, as down jacket makers typically post losses from January to March due to increased spending. They tend to buy raw materials from November to March in preparation for the next year of manufacturing.

Quang Viet’s first-quarter earnings per share were NT$0.1, up from losses of NT$1.05 per share in the same period last year, the company said in a statement. .

Due to strong customer demand for the brand, first-quarter revenue increased 94.06% year-on-year to NT$3.01 billion, with a gross margin of 13.85% , the company said.

Quang Viet said it has order visibility through September.

Quang Viet’s customers include Under Armor Inc, New Balance Inc, Mammut Sports Group AG, Helly Hansen Group and Puma AG.

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Michael O. Stutler