Giant Group hits new quarterly record, but margins impacted
The Giant Manufacturing Company Limited (Giant Group) has posted a record quarter in the second quarter, bringing the company’s first half sales for 2022 to 45.01 Billion TWD (£1.24 billion), up 7.2% like-for-like.
Like many financials of late, the company is not immune to pressures on gross margins, which reduced in the face of Chinese production halts attributed to a tight Covid policy, plus a rising price on raw materials and staffing costs in the face of inflationary and supply pressures.
All of this resulted in a 5.2% decline in profits before tax when compared to the same period a year prior. That said, post-tax profits were marginally ahead, up 2.1% to TWD 3.62 billion, this in large part down to a reduction in the tax burden down to the dip in profitability.
The record takings in the second quarter, Jo Beckendorff writing for RadMarkt reports, were in large part attributed to OE contract scoops, plus a general recovery in the Chinese marketplace.
Forward looking, the group writes on much improved inventory levels in key markets like the US and Europe and at the price points where volume sellers had been straining bike shops ability to maximise turnover. Bottlenecks that remain tend to sit at the upper tiers of bike pricing.
Preceding the record quarter, the Giant Group in spring spoke of halting trade in Russia in response to the invasion, all the while providing support for partners who had been forced to evacuate Ukraine. On the subject of conflict, though it as yet has no known public bearing on the Giant Group, which operates in China and Taiwan, here are just some of the concerns facing businesses importing from both regions at a time when Chinese military drills have extended.
The Q2 record saw turnover increase by 6.4% to reach TWD 22.74 billion at a slightly reduced gross margin to the same quarter in the prior year, meaning a quarterly profit dip after tax to 1.8 billion TWD. As above this was related to increased staffing costs, as well as logistics headwinds.
