Taiwan's garment maker reported robust profit records for 2004

Jan 21, 2005 Ι Industry In-Focus Ι General Items Ι By Judy, CENS
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Taipei, Jan. 21, 2005 (CENS)--Most of Taiwan's garment makers enjoyed good profit performances in 2004, with Eclat Textile Co. posting the highest annual profit growth of 70% to record earnings per share (EPS) of NT$3 (US$0.09 at US$1 = US$34).

Among other makers, Tainan Enterprise Co. raked in earnings of NT$600 million (US$17.65 million) or NT$4.8 (US$0.14) per share; Makalot Industrial Co. saw earnings stay at the same level as registered in 2003; and Nien Hsing Textile Co. garnered record revenues although experiencing a 20% drop in earnings.

Thanks to increasing orders for knitted woven cloths and garments, Eclat gained NT$294 million (US$8.65 million) in pretax profits, reaching 107.3% of its twice-hiked profit target. The company attributed the good performance in 2004 to a sharp rise of 60% in revenue of garments and relatively thick profits earned from sales of knitted woven products.

A senior official at Eclat believed that the company's expansions in overseas operations this year would boost the production ratio for garments to 40% from the current 30%. Besides, the profits of its knitted woven products may remain at a level of 17%-18% for the year as well.

Last year Tainan Enterprise saw rising orders for woven fabric garment, as some American buyers switched to the firm their orders placed with manufacturers in mainland China after the U. S. government decided to lay barriers on textile products imported from the mainland after the cancellation of the Multi-fiber Agreement on Global Textile Quotas starting this year.

The company estimated that the booming orders received in December of 2004 generated profits of more than NT$50 million (US$1.47 million), helping boost the firm's annual earnings to NT$600 million (US$17.65 million).

In 2004 Makalot registered earnings of NT$700 million (US$20.59 million) or NT$6 (US$0.18) per share, the same levels as recorded in 2003, yet it was still the most profitable garment maker in Taiwan. However, the company worried that orders received by the firm has been declining annually, which might undermine its position as top earner among garment makers in the future.

Last year, Nien Hsing posted record revenue but its pretax profits dropped 20% from a year earlier to NT$1.711 billion or NT$2.86 (US$0.084) per share. A senior company official attributed the profit drop partly to the higher manufacturing cost of the two new plants in Lesotho, which became operational in the fourth quarter of 2004, and partly to the firm's foreign exchange losses.
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