Superalloy (SAI), a leading global manufacturer of automotive wheel rims, reported strong financial results for the second quarter and first half of 2024.
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The Taiwan-based company saw a strong rise in orders in the first half of the year, driven mainly by increased demand from European and Japanese premium auto brands, including Toyota, Jaguar Land Rover, Porsche, BMW and Ferrari. This surge in orders effectively offset a decline in shipments to U.S. brands.
As a tier 1 supplier to the world’s leading automakers, SAI has customers across the globe and experience designing products for major automakers in Europe, the US and Japan.
Revenues during this period were significantly more diversified, with 61% coming from European brands, 20% from Japanese brands, 12% from US brands, and the remaining 7% from other customers. Notably, revenues from Japanese brands surged 83% compared to the same period in 2023, while European brands increased by 12.9%.
Secondary alloy wheels are gaining momentum in the luxury market
The proportion of secondary aluminum wheel rims in SAI’s total production is increasing from 26% in the first half of 2023 to 32% in 2024, reflecting increased focus on ESG (environmental, social and governance) practices by automotive brands. The change also helps SAI promote recycled aluminum content. SAI’s secondary aluminum was recently certified by Rolls-Royce and has been adopted by seven other brand clients.
Luxury car manufacturers continue to introduce new energy vehicles while also pushing to reduce carbon dioxide emissions. SAI will not only require new projects to include green aluminum or secondary aluminum quotes, but also plan to incorporate secondary aluminum into existing products for approved customers. It is expected that the adoption rate of secondary aluminum will rise to 40% by the end of 2024, contributing to sustained profitability improvement.
Despite a slowdown in global sales of regular passenger cars, the luxury vehicle market continues to outpace the trend: According to USD Analytics’ latest luxury electric vehicle market report, the sector is forecast to grow at a compound annual growth rate (CAGR) of 12.9% from 2024 to 2032.
In addition, brands such as BMW, Mercedes-Benz and Audi are withdrawing from the price war in the Chinese market, which is expected to stabilize and strengthen the overall luxury car market.
The entire automotive industry is gradually evolving with the shift towards hybrid, electric and new energy vehicles in the premium segment. This trend is expected to boost the sales of SAI’s customized wheel rims.
SAI maintains a cautiously optimistic outlook for the second half of the year. It expects shipments to outperform the first half. The company aims to maintain year-over-year revenue growth throughout the year.
To maximize aluminum’s value contribution and further align with ESG sustainable development goals, SAI is fully committed to a responsible aluminum value chain and will continue to explore, innovate and develop new applications for wrought aluminum.
In July 2024, SAI reported consolidated revenue of NT$547 million (approximately US$16.86 million), down 3.84% from NT$569 million in July 2023. Consolidated revenue for the second quarter of 2024 was NT$1.873 billion, down 2.64% year-on-year, and operating profit was NT$258 million, up 88.88% year-on-year. However, due to the depreciation of the Japanese yen, net profit attributable to the parent company for the second quarter was NT$164 million, down 3.67% year-on-year.
In the first half of 2024, SAI’s cumulative consolidated sales were NT$3.828 billion, up 3.05% year-on-year. Operating profit increased 68.39% to NT$530 million, and net profit attributable to the parent company increased 37.02% to NT$413 million. In the first half of 2024, gross profit margin was 27%, operating profit margin was 14%, and net profit margin was 11%, all of which improved compared to 2023.
This marks the highest first-half profit margin in the past five years. Cumulative consolidated sales from January to July 2024 reached NT$4.375 billion, up 2.13% from NT$4.284 billion in 2023.
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