TAIPEI: Swancor Industry Co Ltd, which manufactures rotor resin for wind turbines and corrosion-resistant materials, yesterday said that its net income fell 80.6 percent annually to NT$33.94 million (US$1.05 million) in the first quarter, with earnings per share falling from NT$2.01 to NT$0.39 over the same period.
In the first quarter, consolidated revenue dropped 36.65 percent annually to NT$1.24 billion, which the company attributed to a high comparison base in the same period last year.
“The overheated situation in the industry during the first quarter last year led to the shortage of some raw materials for wind rotors,” which helped lift the company’s sales at the time, Swancor chairman Robert Tsai told at an investors’ conference in Taipei.
The company’s move to lower the average selling prices of its products in the first quarter also put pressure on its top-line performance, Tsai said.
While the company is positive about the remaining quarters of this year, “we need one more quarter to observe the market sentiment,” Tsai said.
Tsai said shipments for next quarter are expected to be flat from a year earlier, but added that they might grow significantly in the fourth quarter in light of traditionally high wind turbine installations in China during that quarter.
Last year, six provinces in China shrank their wind power investments to ease a glut in the industry, but Chinese authorities have pledged to continue wind power development, Tsai said, citing an announcement made by the Chinese National Energy Administration last month that wind turbine installations in China are expected to reach a capacity of 30.83 gigawatts this year.
Sales in China accounted for 78 percent of the firm’s revenue in the first quarter, while revenue from Taiwan contributed about 12 percent and other areas contributed a total of 9 percent, company data showed.
Tsai said the company is looking at other overseas markets, after shipping products to two Indian companies last quarter.
Swancor is also working to obtain international certifications for its high-end products, such as carbon fiber materials and mold resins, to expand its global client base, he said.
As for the two offshore wind turbines in Taiwan, the company is expected to begin their commercial operation by the end of this year, after obtaining permission for turbine construction from the Ministry of Economic Affairs late last month, he said.
Meanwhile, Swancor is in the process of transforming into an international investment holdings company, a move that would help integrate its chemicals and energy businesses, as well as enhance its competitiveness. The planned share swap for the transformation is to begin in September, the company said in a filing with the Taiwan Stock Exchange.
Tsai said the company faced funding pressure last year, but the situation should be relieved by the increase of capital for its Shanghai subsidiary from its major partner in China, Goldwind Science and Technology Co Ltd, he said.
The company plans to distribute a cash dividend of NT$3.5 per share based on its earnings per share of NT$11.85 last year.
