Giant Group BOD today (May 10) approved the 2023 first quarter consolidated financial report. Due to the impact from European and N. American markets to reducing inventories plus higher comparison base with last year, consolidated revenue came in at NT$20.12Billion, a decline of 9.6% YoY. Gross Margin rate decreased to 21.9% at pre pandemic level due to discounts and lower production utilization rate. Operating profit came in at NT$1.69Billion, a decline of 27.3% YoY which was affected by gross margin performance. Net profit before tax came in at NT$1.52Billion, a decline of 41.3% YoY which was affected by non-operating expenses such as FX loss NT$82mn (compared to a FX gain of NT$230mn in the same period last year) and an increase in interest expenses. Net profit after tax came in at NT$836million, a decline of 54.1% YoY. In addition, first quarter tax expenses increased due to the increase in undistributed surplus earnings and reduction in applicable tax benefits. First quarter EPS at NT$2.13.
Looking at Giant Group’s own brand performance in first quarter based on local currency, China domestic sales had the best performance. Due to the recovery of consumer spending post pandemic and increase health awareness among the Chinese consumers, there is an increase in cycling populations which drove demand for mid to performance level cycling products that led to first quarter sales increase over 50%. Giant Europe and US sales were affected by higher inventories in the entry to mid-level products, hence sales declined high single and double digits respectively. First quarter E-Bike sales contributions to the group at 32% where Europe remains as the key market.
Consider overall global economy situation as well as the current market is undergoing inventories adjustments, this year to the bicycle industry would be a challenging year. In Europe, the colder Spring is delaying the reduction of inventories. Although there are many challenges in the short term but the 3 main trends; e-mobility, eco-friendly and fitness would continue to drive sales for the mid to performance level products and Giant Group remains optimistic in mid to long term growth for the cycling industry.