Machinery firms saw mixed profitability in first six months

Taipei, Sept. 9, 2005 (CENS)--Taiwan's domestic machinery manufacturers saw profitability mixed in the first half of this year, with some reporting profits and others incurring losses.

Thanks to the increased demand for automation equipment and garden tools, Kenmec Mechanical Engineering Co., Jenn Feng Industrial Co., and Anderson Industrial Corp. all doubled their earnings in the first half of this year, as compared to the same period last year. Fu Sheng Industrial Co. and Kaulin Manufacturing Co. each saw a 20% year-on-year decline in earnings in the first half of this year because of slumping demand in the U.S. and mainland China markets.

Because of their disparate product ranges and different target markets, domestic machinery manufacturers had very diverse performances in the first half of this year. Thanks to the large expansion of domestic LCD flat-panel plants, Kenmec said it has received orders to fill its production lines through the beginning of next year. Kenmec is a manufacturer focusing on palletizer and material handling machinery.

In the first half of this year, Kenmec saw after-tax earnings grow at an annual rate of 7.26% to reach NT$307 million (US$9.59 million at US$1:NT$32), or NT$4 (US$0.125) in earnings per share.

Jenn Feng Industrial Co., which concentrates on the production of garden tools and power tools, noted it has seen an increase in sales and predicts better earnings performance in the second half of this year. In the first half of last year, the company reported an operating loss of NT$37.32 million (US$1.16 million) because of the appropriation of bad accounts. For the first half of this year, the company had NT$179 million (US$5.59 million) in after-tax earnings because it has established a strategic alliance with a large foreign customer. The company said it would see fourth-quarter sales and earnings hit record highs.

Anderson focuses on the production of drilling machines, forming machines and CNC (computerized numerically controlled) non-metal machining centers. The company saw annual profits double in the first half of this year because of the growth in market demand and a slump in material prices. The company said it would see better sales performance in this year's second half than in the first.

Thanks to hot sales of medium- and large-sized double-column machining centers and C-type machining centers, Awea posted NT$209 million (US$6.53 million) in after-tax earnings in the first half of this year, or NT$3.16 (US$0.098) in EPS, up 40% year-on-year.

Despite their poor performance in the first half, Fu Sheng and Kaulin predicted they would see better performance in the second half of this year because of successful adjustments in operations.