Pou Chen reports quarterly profit of NT$4.64 billion, the second highest in its history

  • By Chen Cheng-hui / Staff Reporter

Shoemaker Pou Chen Corp (寶成工業) reported a net profit of NT$4.64 billion ($155.67 million) in the first quarter of the year on Friday, down 26.1 percent from a year earlier. prior year, but remains the second highest net profit for the period in the company’s history.

The world’s largest supplier of branded sports and leisure footwear also invests in retail and land development, as well as financial service providers such as Nan Shan Life Insurance Co (南山人壽).

Pou Chen said the decline in profits was largely due to Nan Shan’s lower investment earnings, compared to a year earlier. The company recorded NT$2.63 billion in investment gains from Nan Shan for the first quarter, down from the NT$4.69 billion it had recorded in the same period of the year last, she said in a statement.

Photo: Hung Mei-hsiu, Taipei Times

While the company’s non-operating profit also fell 28.2% year-on-year to NT$4.19 billion in the January-March quarter, its earnings per share were NT$1.57, from NT$2.13 a year earlier, the company’s financial report showed .

Gross margin was 24.1% from 25.7% a year ago, while operating margin fell to 3.8% from 4.8%, according to the report.

First-quarter revenue fell 5.1% year-on-year to NT$67.26 billion as its footwear and sporting goods retail business was negatively impacted by surges in COVID-19 in China, despite steady improvement in its shoe manufacturing business, Pou Chen said.

The company’s original equipment manufacturing (OEM) business generated sales of NT$42.88 billion in the first quarter, up 10.7% year-on-year on higher shipments and to rising commodity prices, he said.

The company shipped about 70.9 million pairs of shoes last quarter, a 3.8% year-on-year increase, while average selling prices were $19.65 per pair, up from $17.79 a year earlier, he said.

The OEM footwear business for international brands such as Nike Inc, Adidas AG, Asics Corp, New Balance Athletic Shoe Inc, Timberland Co and Salomon SAS accounted for 63.8% of the company’s total revenue last year. quarter, he said.

The majority of Pou Chen’s shoe production is in Vietnam, Indonesia and China, accounting for 35%, 49% and 10% of the company’s total production respectively last quarter.

Its retail business – operated by Hong Kong-listed subsidiary Pou Sheng International Ltd (寶勝國際) – saw sales decline 24.5% from a year earlier to $24.14 billion. NT, due to China’s strict COVID-19 restrictions, Pou Chen said.

Retail accounted for 35.9 percent of Pou Chen’s revenue last quarter, he added.

At the end of the first quarter, Pou Sheng operated 8,186 stores, up from 8,417 a year earlier, Pou Chen said.

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