Taiwan Leading Machine-tool Firms See Promise for Three Months

Taipei, Aug. 19, 2008 (CENS)--Thanks to the success in developing the U.S., European and emerging Southeast Asian markets, domestic leading manufacturers of machine tools, including Awea Mechantronic Co., Tongtai Machine & Tool Co., Goodway Machine Corp. and Shieh Yih Machinery Industry Co., see promise of rising orders for three months.

With the depreciation of N.T. dollar against the greenback, domestic machine-tool manufacturers are expected to continue achieving sizable profits for the rest of this year.

Of them, Awea posted NT$3.41 (US$0.11 at US$1:NT$31) in pretax earnings per share in the first half of this year. The company boasted it has received orders for double-column machining centers to keep production lines filled for six months.

With a backlog of NT$1.8 billion (US$58.06 million) orders, Awea is expected to maintain its position as Taiwan's most profitable machine-tool manufacturer. An institutional investor estimated Awea would see after-tax earnings reach NT$5 (US$0.16) per share this year.

Awea said it registered NT$149 million (US$4.8 million) in pretax earnings in the second quarter of this year, up 24.5% from the previous quarter. The company's plant in Taichung Science-based Industrial Park has recently boosted monthly production capacity to 80 C-frame machining centers from 60 earlier, which will help boost sales in the second half of this year.

The company upward adjusted product prices in April to reflect the rise in raw material costs. The effects of the product prices will emerge in September. It is expected the company will be able to see increase of gross operating profit margin in the second half of this year.

Goodway posted NT$1.94 (US$0.06) in after-tax EPS in the first half of this year, NT$1.3 (US$0.04) of which were reached in the second quarter. The company saw gross operating profit margin increase to 30% in June from 25.5% in the first quarter.

Thanks to the success in developing such emerging markets as East Europe, Egypt and Thailand, the company predicted it would likely see sales grow 20% year-on-year this year.

Despite the write-off of NT$60 million (US$1.93 million) in losses from foreign exchange in the first quarter of this year, Shieh Yih is still optimistic about its operations this year as it has seen increase of orders from mainland China.

Tongtai posted NT$3.48 billion (US$112.25 million) in cumulative sales in the first half of this year, up a whopping 54.2% a year earlier. The company said it competes favorably against peers in profitable products as PCB (printed circuit board) drilling machines and optoelectronic products, with the company aiming to achieve NT$7 billion (US$225.8 million) in annual sales this year.