Foreign currency losses take a toll on Walsin Lihwa's profit margin
Walsin Lihwa Corp Reports Q2 2025 Net Profit Drop
Walsin Lihwa Corp, a Taiwanese company specialising in electrical wires and cables, iron and steel products, and semi-finished steel products, has announced a 24.59% decrease in net profit for the second quarter of 2025 compared to the previous quarter.
The company's earnings report does not provide specific reasons for the profit decline, but factors such as rising raw material or production costs, decrease in sales volume or product pricing pressures, one-off expenses or investments, and changes in market demand or competitive landscape could potentially be contributing factors.
One noticeable factor affecting revenue is the sharp appreciation of the NT dollar against the greenback, which cut revenue by NT$800 million. Despite this, cable shipments remained strong last quarter, boosting revenue by NT$2 billion from the previous quarter. Cable shipments this quarter are expected to be similar to last quarter's level, supported by the grid resilience plan and ongoing private construction projects.
Cables were the second-largest revenue contributor, accounting for 29% of the total, while stainless steel was the biggest contributor, accounting for 52%. Nickel accounted for 17% of the total revenue, and others accounted for 2%.
The company expects stainless steel sales this quarter to be flat on a quarterly basis, but steel sales in Europe are expected to remain sluggish this quarter on seasonal weakness. Local steel prices should remain stable this quarter due to uncertainty about US tariffs being almost over and nickel prices hitting rock bottom.
Walsin Lihwa Corp also gave a cautious outlook for its nickel business, citing geopolitical uncertainties in Indonesia linked to mining policy and oversupply. Nickel shipments last quarter rose quarter-on-quarter due to fewer deferred shipments.
In addition to the net profit decline, the company booked NT$10.7 billion in foreign exchange losses last quarter. Revenue from nickel pig iron and nickel matte decreased NT$100 million last quarter due to the local currency's appreciation.
The company is currently constructing a plant to make submarine cables, which is on schedule and is expected to be completed by the end of this year. The plant will undergo a year-long verification phase next year before starting shipments in 2027.
Despite the net profit decline, Walsin Lihwa Corp reported a net profit of NT$488 million for the last quarter. Earnings per share dropped to NT$0.12 from NT$0.17 in the first quarter and NT$0.54 a year earlier. The sharp appreciation of the NT dollar against the greenback led to a non-operating loss of NT$100 million. Gross margin last quarter fell to 7.3% from 8.2% in the previous quarter and 8.5% a year earlier.
For an authoritative explanation of the precise causes of the 24.59% net profit drop, the company’s official quarterly financial report or investor release should be consulted.
[1] Corporate Governance Page [2] General Economic Issues in Indonesia [3] Walsin Lihwa's Green Energy Ventures [4] Q2 2025 Earnings Report Date
- The decline in Walsin Lihwa Corp's net profit for Q2 2025, amidst strong cable shipments, may be attributed to factors such as increases in raw material costs, fluctuations in currency exchange rates, and potential changes in the financial landscape of the industry.
- Despite the noted net profit drop, Walsin Lihwa Corp's future ventures in the business sector, including green energy projects and the construction of a plant to make submarine cables, indicate the company's continuous pursuit of growth within the industry and finance.
