Teco Electric & Machinery : 2014/08/19 TECO Announces 2Q14 Results

TECO Electric & Machinery Co., Ltd.

5F, 19-9, San Chong Road, Nan-Kang, Taipei 115, Taiwan

Tel: [phone] | Fax: [phone] | http://www.teco.com.tw

TECO Announces 2Q 2014 Results

Taipei, Taiwan, August 14th 2014 - TECO Electric and Machinery Co., Ltd., a leading manufacturer and service provider of motors, home appliances and information technology, today announced its financial results for 2Q 2014.

Consolidated Basis Unit: NT$1,000

(1) Excluding non-controlling interests.

Period Item	2Q 2014	vs. 2Q 2013 (+/-%)	vs. 1Q 2014 (+/-%)	1H 2014	vs. 1H 2013 (+/-%)
Operating Revenue	14,236,090	-5.2%	5.2%	27,774,510	-1.8%
Gross Profit, net	3,590,988	3.3%	9.2%	6,879,178	3.5%
Operating Profit	1,351,181	7.1%	14.5%	2,531,579	4.9%
Income Tax Expense	435,920	6.3%	17.0%	808,415	5.0%
Net Income	1,470,149	41.3%	70.7%	2,331,404	25.4%
EPS(NT$)	0.74			1.18

Please find the details in the following pages.

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For the second quarter of 2014, net revenue totaled NT$14,236 million and gross profit was NT$3,591 million. Operating profit came in at NT$1,351 million and net income was NT$1,470 million. Earnings per share was reported as NT$0.74.
Recurring operating revenue decreased by 5.3% as opposed to 2Q'13. Gross profit and operating profit increased by 3.3% and 7.1% respectively. Net income increased by 41.3%. The increase in non-operating income was mainly due to the increase in gain on disposal of property, plant and equipment in 2Q14. (See table 1)

Table 1

(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	2Q ' 14 (3) 2Q ' 13 (3) YoY % Amount % Amount %
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	14,236,090 100.0% 15,023,036 100.0% -5.2% 14,160,820 99.5% 14,959,092 99.6% -5.3% 75,270 0.5% 63,944 0.4% 17.7% (10,645,965) -74.8% (11,548,138) -76.9% -7.8%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	3,590,988 25.2% 3,477,794 23.1% 3.3% (2,239,807) -15.7% (2,216,484) -14.8% 1.1%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	1,351,181 9.5% 1,261,310 8.4% 7.1% 652,620 4.6% 309,927 2.1% 110.6% 239,237 1.7% 187,690 1.2% 27.5% 417,036 2.9% 127,841 0.9% 226.2% (59,012) -0.4% (63,324) -0.4% -6.8% 55,359 0.4% 57,720 0.4% -4.1%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	2,003,801 14.1% 1,571,237 10.5% 27.5% (435,920) -3.1% (410,242) -2.7% 6.3%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	1,470,149 10.3%1,040,258 6.9% 41.3%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	0.74 0.56

Note:

(1) Unrealized / realized gain on inter-affiliate accounts included. (2) Excluding non-controlling interests.

(3) Comply with IFRS.

2

Recurring operating revenue for 2Q'14 increased 5.3% over 1Q'14. Gross profit increased by 9.2% while operating profit increased by 14.5%. Net income increased by 70.7%. The increase in non-operating income was mainly due to the increase in gain on disposal of property, plant and equipment in 2Q14. (See table 2)

Table 2

(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	2Q ' 14 (3) 1Q ' 14 (3) YoY % Amount % Amount %
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	14,236,090 100.0% 13,538,420 100.0% 5.2% 14,160,820 99.5% 13,442,807 99.3% 5.3% 75,270 0.5% 95,613 0.7% -21.3% (10,645,965) -74.8% (10,250,761) -75.7% 3.9%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	3,590,988 25.2% 3,288,190 24.3% 9.2% (2,239,807) -15.7% (2,107,792) -15.6% 6.3%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	1,351,181 9.5% 1,180,398 8.7% 14.5% 652,620 4.6% 143,241 1.1% 355.6% 239,237 1.7% 111,886 0.8% 113.8% 417,036 2.9% 5,069 0.0% 8127.2% (59,012) -0.4% (62,041) -0.5% -4.9% 55,359 0.4% 88,327 0.7% -37.3%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	2,003,801 14.1% 1,323,639 9.8% 51.4% (435,920) -3.1% (372,495) -2.8% 17.0%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	1,470,149 10.3% 861,255 6.4% 70.7%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	0.74 0.44

Note:

(1) Unrealized / realized gain on inter-affiliate accounts included. (2) Excluding non-controlling interests.

(3) Comply with IFRS.

3

For the second half of 2014, operating revenue totaled NT$27,744 million and gross profit was NT$6,879 million. Operating profit came in at NT$2,532 million and net income was NT$2,331 million. Earnings per share was reported as NT$1.18.
Recurring operating revenue decreased by 2.0% as opposed to 1H'13. Gross profit and operating profit increased by 3.5% and 4.9% respectively. Net income increased by 25.4%. The increase in non-operating income was mainly due to the increase in gain on disposal of property, plant and equipment in 2Q14. (See table 3)

Table 3

(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	1H ' 14 (3) 1H ' 13 (3) YoY % Amount % Amount %
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	27,774,510 100.0% 28,288,402 100.0% -1.8% 27,603,627 99.4% 28,175,911 99.6% -2.0% 170,883 0.6% 112,491 0.4% 51.9% (20,896,726) -75.2% (21,647,285) -76.5% -3.5%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	6,879,178 24.8% 6,644,013 23.5% 3.5% (4,347,599) -15.7% (4,231,453) -15.0% 2.7%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	2,531,579 9.1% 2,412,560 8.5% 4.9% 795,861 2.9% 384,671 1.4% 106.9% 351,123 1.3% 285,082 1.0% 23.2% 422,105 1.5% 161,599 0.6% 161.2% (121,053) -0.4% (125,775) -0.4% -3.8% 143,686 0.5% 63,765 0.2% 125.3%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	3,327,440 12.0% 2,797,231 9.9% 19.0% (808,415) -2.9% (770,059) -2.8% 5.0%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	2,331,404 8.4% 1,858,895 6.6% 25.4%
(In NT$1,000, except EPS) Operating Revenue Recurring Operating Revenue Gain on Sales of Financial Assets Operating Costs Gross Profit, net (1) Operating expenses Operating Profit Non-operating Income (Expense) Other Income Other Gains and Losses Financial Costs Share of Profit (Loss) of Associates and Joint Ventures Accounted for Using Equity Method Income before Tax Income Tax Expense Net Income (2) EPS	1.18 1.01

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Table 4

June 30, 2014 Mar 31, 2014 (In NT$1,000) Cash & Cash Equivalents 15,434,733 14,520,253 Receivables 14,239,346 12,267,554 Inventories 11,092,168 11,137,487 Other Current Assets 3,237,871 2,848,927 Total Current Assets 44,004,118 40,774,221 Financial Assets Available for sale - Non Current 12,866,672 11,699,901 Long-Term Investments Under Equity Method 5,069,704 5,121,932 Other Non-Current Assets 19,678,767 20,593,189 Total Non-Current Assets 37,615,143 37,415,022 Total Assets 81,619,261 78,189,243 Current Liabilities 22,681,525 19,140,433 Bonds Payable 1,443,300 1,470,000 Long-Term Borrowings 4,127,692 4,431,884 Other Non-Current Liabilities 4,239,982 4,146,339 Total Non-Current Liabilities 9,810,974 10,048,223 Total Liabilities 32,492,499 29,188,656 Total Shareholders' Equity(1) 49,126,762 49,000,587	June 30, 2013
June 30, 2014 Mar 31, 2014 (In NT$1,000) Cash & Cash Equivalents 15,434,733 14,520,253 Receivables 14,239,346 12,267,554 Inventories 11,092,168 11,137,487 Other Current Assets 3,237,871 2,848,927 Total Current Assets 44,004,118 40,774,221 Financial Assets Available for sale - Non Current 12,866,672 11,699,901 Long-Term Investments Under Equity Method 5,069,704 5,121,932 Other Non-Current Assets 19,678,767 20,593,189 Total Non-Current Assets 37,615,143 37,415,022 Total Assets 81,619,261 78,189,243 Current Liabilities 22,681,525 19,140,433 Bonds Payable 1,443,300 1,470,000 Long-Term Borrowings 4,127,692 4,431,884 Other Non-Current Liabilities 4,239,982 4,146,339 Total Non-Current Liabilities 9,810,974 10,048,223 Total Liabilities 32,492,499 29,188,656 Total Shareholders' Equity(1) 49,126,762 49,000,587	14,423,676 12,978,193 11,075,559 2,308,368
June 30, 2014 Mar 31, 2014 (In NT$1,000) Cash & Cash Equivalents 15,434,733 14,520,253 Receivables 14,239,346 12,267,554 Inventories 11,092,168 11,137,487 Other Current Assets 3,237,871 2,848,927 Total Current Assets 44,004,118 40,774,221 Financial Assets Available for sale - Non Current 12,866,672 11,699,901 Long-Term Investments Under Equity Method 5,069,704 5,121,932 Other Non-Current Assets 19,678,767 20,593,189 Total Non-Current Assets 37,615,143 37,415,022 Total Assets 81,619,261 78,189,243 Current Liabilities 22,681,525 19,140,433 Bonds Payable 1,443,300 1,470,000 Long-Term Borrowings 4,127,692 4,431,884 Other Non-Current Liabilities 4,239,982 4,146,339 Total Non-Current Liabilities 9,810,974 10,048,223 Total Liabilities 32,492,499 29,188,656 Total Shareholders' Equity(1) 49,126,762 49,000,587	40,785,796 10,670,283 4,731,863 20,041,730
June 30, 2014 Mar 31, 2014 (In NT$1,000) Cash & Cash Equivalents 15,434,733 14,520,253 Receivables 14,239,346 12,267,554 Inventories 11,092,168 11,137,487 Other Current Assets 3,237,871 2,848,927 Total Current Assets 44,004,118 40,774,221 Financial Assets Available for sale - Non Current 12,866,672 11,699,901 Long-Term Investments Under Equity Method 5,069,704 5,121,932 Other Non-Current Assets 19,678,767 20,593,189 Total Non-Current Assets 37,615,143 37,415,022 Total Assets 81,619,261 78,189,243 Current Liabilities 22,681,525 19,140,433 Bonds Payable 1,443,300 1,470,000 Long-Term Borrowings 4,127,692 4,431,884 Other Non-Current Liabilities 4,239,982 4,146,339 Total Non-Current Liabilities 9,810,974 10,048,223 Total Liabilities 32,492,499 29,188,656 Total Shareholders' Equity(1) 49,126,762 49,000,587	35,443,876
June 30, 2014 Mar 31, 2014 (In NT$1,000) Cash & Cash Equivalents 15,434,733 14,520,253 Receivables 14,239,346 12,267,554 Inventories 11,092,168 11,137,487 Other Current Assets 3,237,871 2,848,927 Total Current Assets 44,004,118 40,774,221 Financial Assets Available for sale - Non Current 12,866,672 11,699,901 Long-Term Investments Under Equity Method 5,069,704 5,121,932 Other Non-Current Assets 19,678,767 20,593,189 Total Non-Current Assets 37,615,143 37,415,022 Total Assets 81,619,261 78,189,243 Current Liabilities 22,681,525 19,140,433 Bonds Payable 1,443,300 1,470,000 Long-Term Borrowings 4,127,692 4,431,884 Other Non-Current Liabilities 4,239,982 4,146,339 Total Non-Current Liabilities 9,810,974 10,048,223 Total Liabilities 32,492,499 29,188,656 Total Shareholders' Equity(1) 49,126,762 49,000,587	76,229,672
June 30, 2014 Mar 31, 2014 (In NT$1,000) Cash & Cash Equivalents 15,434,733 14,520,253 Receivables 14,239,346 12,267,554 Inventories 11,092,168 11,137,487 Other Current Assets 3,237,871 2,848,927 Total Current Assets 44,004,118 40,774,221 Financial Assets Available for sale - Non Current 12,866,672 11,699,901 Long-Term Investments Under Equity Method 5,069,704 5,121,932 Other Non-Current Assets 19,678,767 20,593,189 Total Non-Current Assets 37,615,143 37,415,022 Total Assets 81,619,261 78,189,243 Current Liabilities 22,681,525 19,140,433 Bonds Payable 1,443,300 1,470,000 Long-Term Borrowings 4,127,692 4,431,884 Other Non-Current Liabilities 4,239,982 4,146,339 Total Non-Current Liabilities 9,810,974 10,048,223 Total Liabilities 32,492,499 29,188,656 Total Shareholders' Equity(1) 49,126,762 49,000,587	21,508,794 2,965,641 5,078,119 4,748,086
June 30, 2014 Mar 31, 2014 (In NT$1,000) Cash & Cash Equivalents 15,434,733 14,520,253 Receivables 14,239,346 12,267,554 Inventories 11,092,168 11,137,487 Other Current Assets 3,237,871 2,848,927 Total Current Assets 44,004,118 40,774,221 Financial Assets Available for sale - Non Current 12,866,672 11,699,901 Long-Term Investments Under Equity Method 5,069,704 5,121,932 Other Non-Current Assets 19,678,767 20,593,189 Total Non-Current Assets 37,615,143 37,415,022 Total Assets 81,619,261 78,189,243 Current Liabilities 22,681,525 19,140,433 Bonds Payable 1,443,300 1,470,000 Long-Term Borrowings 4,127,692 4,431,884 Other Non-Current Liabilities 4,239,982 4,146,339 Total Non-Current Liabilities 9,810,974 10,048,223 Total Liabilities 32,492,499 29,188,656 Total Shareholders' Equity(1) 49,126,762 49,000,587	12,791,846
June 30, 2014 Mar 31, 2014 (In NT$1,000) Cash & Cash Equivalents 15,434,733 14,520,253 Receivables 14,239,346 12,267,554 Inventories 11,092,168 11,137,487 Other Current Assets 3,237,871 2,848,927 Total Current Assets 44,004,118 40,774,221 Financial Assets Available for sale - Non Current 12,866,672 11,699,901 Long-Term Investments Under Equity Method 5,069,704 5,121,932 Other Non-Current Assets 19,678,767 20,593,189 Total Non-Current Assets 37,615,143 37,415,022 Total Assets 81,619,261 78,189,243 Current Liabilities 22,681,525 19,140,433 Bonds Payable 1,443,300 1,470,000 Long-Term Borrowings 4,127,692 4,431,884 Other Non-Current Liabilities 4,239,982 4,146,339 Total Non-Current Liabilities 9,810,974 10,048,223 Total Liabilities 32,492,499 29,188,656 Total Shareholders' Equity(1) 49,126,762 49,000,587	34,300,640
June 30, 2014 Mar 31, 2014 (In NT$1,000) Cash & Cash Equivalents 15,434,733 14,520,253 Receivables 14,239,346 12,267,554 Inventories 11,092,168 11,137,487 Other Current Assets 3,237,871 2,848,927 Total Current Assets 44,004,118 40,774,221 Financial Assets Available for sale - Non Current 12,866,672 11,699,901 Long-Term Investments Under Equity Method 5,069,704 5,121,932 Other Non-Current Assets 19,678,767 20,593,189 Total Non-Current Assets 37,615,143 37,415,022 Total Assets 81,619,261 78,189,243 Current Liabilities 22,681,525 19,140,433 Bonds Payable 1,443,300 1,470,000 Long-Term Borrowings 4,127,692 4,431,884 Other Non-Current Liabilities 4,239,982 4,146,339 Total Non-Current Liabilities 9,810,974 10,048,223 Total Liabilities 32,492,499 29,188,656 Total Shareholders' Equity(1) 49,126,762 49,000,587	41,929,032

(1) Including non-controlling interests.

About TECO Electric & Machinery Co., Ltd.

TECO Electric & Machinery Co., Ltd. (TSE 1504) was founded in 1956 and has since been well known as one of world's leading motor-manufacturers. For 50 years and running, TECO has now engaged in various business sectors ranging from Industrial Products, Home Appliances, Mechanical and Electrical Construction, Key Components Manufacturing and Information Technology. Teco's consolidated revenue was NT$56.6 Billion for the 2013 fiscal year. More information is available at http://www.teco.com.tw

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