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Pou Chen posts net profit decline

Jun 6, 2022 Taiwan
Pou Chen posts net profit decline
The Taiwanese manufacturer of branded sports footwear reported a drop of 26.1% in net profit in the first quarter of 2022 due to fewer investment gains from its Nan Shan Life Insurance unit
According to the Taipei Times, Pou Chen’s net profit for the first quarter of the current fiscal year totalled 4.64 billion New Taiwan Dollars (155.67 million US dollars), which reflects a decrease of 21.1%, on a comparable basis to the same period of the prior year. Pou Chen specified that the lower profit was largely due to fewer investment gains from the life insurance unit Nan Shan (the company also has investments in retail and land development), but it is still the second-highest quarterly net profit in the company’s history.

Since the company’s non-operating profit also declined by 28.2%, reaching 4.19 billion New Taiwan dollars (142.6 million US dollars), its earnings per share were 1.57 New Taiwan dollars (0.053 US dollars), as compared to 2.13 New Taiwan dollars (0.073 US dollars) in the same quarter of fiscal 2021.

In the first quarter of 2022, the shoemaker's revenue was down by 5.1%, amounting to 67.26 billion New Taiwan dollars (2.14 billion US dollars), on a comparable basis to the first quarter of last year. The company noted that both its retail and original equipment manufacturing (OEM) businesses were negatively impacted by COVID-19 related disruptions in China.

The OEM business, which accounted for 63.8% of total revenue, generated 42.88 billion New Taiwan dollars (1.46 billion US dollars), up by 10.7% year-on-year, thanks to the increase in shipments and product prices. It shipped 70.9 million pairs of shoes, up by 3.8%, at an average selling price of 19.65 US dollars (2021:17.79 US dollars). The majority of Pou Chen’s shoe production is located in Vietnam (35% of the total production this first quarter), Indonesia (49% of the total production this first quarter) and China (10% of the total production this first quarter).

Pou Chen’s retail business (operated by Hong Kong-listed subsidiary Pou Sheng International), responsible for 35.9% of total revenue, recorded in turn a decline of 24.5% in the first three months of the year, totalling 21.14 billion New Taiwan dollars (719.7 million US dollars), on a comparable basis to the same period of fiscal 2021.The company attributed the result to the COVID-19 related disruptions in China.


Image Credits: wallpaperflare.com


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