Awea Mechantronic Bucks Global Economic Downturn

Taipei, Oct. 1, 2008 (CENS)--The global economic slowdown is translating into slower sales for machine tool manufacturers in Taiwan, despite reassuring performance in August, with Awea Mechantronic Co., Taiwan's most profitable manufacturer of machine tools, still seeing steady growth in orders for large double-column machining centers.

Among its peers in Taiwan, Shieh Yih Machinery Industry Co. and Goodway Machine Corp. achieved the best August sales, with the former boasting a 32.3% growth relative to the previous month and the latter posting a 17.08% year-on-year growth in August sales.

Most domestic manufacturers of machine tools said they received ample orders in the first half of this year, leading to high output and shipments in the third quarter of this year.

One maker in Taiwan said the economic slowdown in the U.S. and Europe has caused tough competition in selling standard-type machine tools, except high-margin double-column machining centers.

Awea was the most profitable supplier in Taiwan by posting NT$2.48 (US$0.077 at US$1:NT$32) in after-tax earnings per share in the first half of this year, as well as NT$342 million (US$10.68 million) in sales in August, up 11.03% and 7.5% from the previous month and a year earlier, respectively.

With profit margin impacted by rising material prices and volatile foreign exchange rates early this year, Awea has since April raised quotations to suit specific target markets, with the effect of such price hikes to help recover operating profit margins in September and October.

Goodway said it achieved NT$248 million (US$7.75 million) in August sales, up 17.08% year-on-year, as well as conceding to lackluster performance in the second half of this year.

Shieh Yih posted NT$109.9 million (US$3.43 million) in pretax earnings, or NT$1.1 (US$0.03) in EPS, in the first seven months of this year, down 43% year-on-year.

The company looks to achieving better performance in the second half of this year as it has begun filling new orders received early September.