Pou Chen's Q1 Net Profit Soars 1622% Year-on-Year Due to IFRS 17 Application for Nanshan Investment
Footwear manufacturer Pou Chen Industrial announced its Q1 net profit attributable to owners of the parent company surged by 1622% to NT$2.23 billion, primarily due to increased investment income from its affiliate Nanshan Life, which adopted the IFRS 17 accounting standard this year.
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- 📰 Published: May 14, 2026 at 21:48
- 🔍 Collected: May 14, 2026 at 22:02 (14 min after Published)
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Central News Agency, Taipei, 14th - Footwear manufacturer Pou Chen Industrial's board of directors today approved its first-quarter financial report, showing consolidated operating revenue of NT$63.092 billion, a 5.9% year-on-year decrease. The first-quarter net profit attributable to owners of the parent company was NT$2.23 billion, a 1622% increase compared to the same period last year, with earnings per share of NT$0.76.
Pou Chen stated that Nanshan Life, an equity-method investment, adopted the IFRS 17 accounting standard from this year. As a result, the related investment amount was retrospectively restated according to IFRS 17 rules, and the Q1 2025 financial report was restated. After restatement, the Q1 2025 earnings per share were adjusted to NT$0.04.
Pou Chen explained that the investment income recognized under the equity method in the first quarter of this year was NT$1.768 billion, an increase of NT$2.577 billion from the same period last year. Of this, the investment income related to its direct and indirect 18.09% stake in Nanshan Life was NT$1.409 billion, an increase of NT$2.738 billion from the same period last year.
Additionally, net foreign exchange losses increased by NT$302 million, and losses from financial instrument valuations increased by NT$131 million. The consolidated net non-operating income for the first quarter of this year was NT$1.8 billion, an increase of NT$1.987 billion from the same period last year.
Pou Chen explained that the Q1 consolidated revenue of NT$63.092 billion was a 5.9% decrease from the same period last year, mainly due to the complex and changing global political and economic situation, which put pressure on the shipment momentum of the footwear manufacturing business. However, the sales performance of the sporting goods retail and wholesale business was relatively stable.
Pou Chen stated that the footwear manufacturing business continued to be the main source of consolidated revenue in Q1. Although changes in the product mix led to a slight increase in the average selling price, macroeconomic uncertainties persist, and brand customers have become more cautious in placing orders, leading to a 9.1% year-on-year decrease in the business's revenue, with its share of consolidated operating revenue falling to 63%.
Regarding the sporting goods retail and wholesale business, Pou Chen explained that in the ever-changing consumer market, by continuously improving operational efficiency, the overall sales in RMB for Q1 saw a narrowed year-on-year decline of 1.1%. In NT dollars, revenue slightly increased by NT$23 million compared to the same period last year, and its share of consolidated operating revenue rose to 36.6%. The other business segment's share of consolidated revenue remained at 0.4% in Q1, with limited impact on overall operations.
In terms of operating profit, Pou Chen pointed out that the Q1 consolidated gross profit was NT$13.97 billion, a 10.5% quarterly decrease. The consolidated gross margin fell from 23.3% in the same period last year to 22.1%. This was mainly due to short-term order fluctuations in the footwear manufacturing business, and the fact that the Eid al-Fitr holiday in Indonesia came early this year and overlapped with the Lunar New Year in China and Vietnam, affecting production schedules. Furthermore, rising labor costs continued to pressure production efficiency. On the other hand, the sporting goods retail and wholesale business continued to strengthen inventory and discount controls, partially offsetting the aforementioned adverse effects. (Editor: Chang Chun-mao) 1150514
Pou Chen stated that Nanshan Life, an equity-method investment, adopted the IFRS 17 accounting standard from this year. As a result, the related investment amount was retrospectively restated according to IFRS 17 rules, and the Q1 2025 financial report was restated. After restatement, the Q1 2025 earnings per share were adjusted to NT$0.04.
Pou Chen explained that the investment income recognized under the equity method in the first quarter of this year was NT$1.768 billion, an increase of NT$2.577 billion from the same period last year. Of this, the investment income related to its direct and indirect 18.09% stake in Nanshan Life was NT$1.409 billion, an increase of NT$2.738 billion from the same period last year.
Additionally, net foreign exchange losses increased by NT$302 million, and losses from financial instrument valuations increased by NT$131 million. The consolidated net non-operating income for the first quarter of this year was NT$1.8 billion, an increase of NT$1.987 billion from the same period last year.
Pou Chen explained that the Q1 consolidated revenue of NT$63.092 billion was a 5.9% decrease from the same period last year, mainly due to the complex and changing global political and economic situation, which put pressure on the shipment momentum of the footwear manufacturing business. However, the sales performance of the sporting goods retail and wholesale business was relatively stable.
Pou Chen stated that the footwear manufacturing business continued to be the main source of consolidated revenue in Q1. Although changes in the product mix led to a slight increase in the average selling price, macroeconomic uncertainties persist, and brand customers have become more cautious in placing orders, leading to a 9.1% year-on-year decrease in the business's revenue, with its share of consolidated operating revenue falling to 63%.
Regarding the sporting goods retail and wholesale business, Pou Chen explained that in the ever-changing consumer market, by continuously improving operational efficiency, the overall sales in RMB for Q1 saw a narrowed year-on-year decline of 1.1%. In NT dollars, revenue slightly increased by NT$23 million compared to the same period last year, and its share of consolidated operating revenue rose to 36.6%. The other business segment's share of consolidated revenue remained at 0.4% in Q1, with limited impact on overall operations.
In terms of operating profit, Pou Chen pointed out that the Q1 consolidated gross profit was NT$13.97 billion, a 10.5% quarterly decrease. The consolidated gross margin fell from 23.3% in the same period last year to 22.1%. This was mainly due to short-term order fluctuations in the footwear manufacturing business, and the fact that the Eid al-Fitr holiday in Indonesia came early this year and overlapped with the Lunar New Year in China and Vietnam, affecting production schedules. Furthermore, rising labor costs continued to pressure production efficiency. On the other hand, the sporting goods retail and wholesale business continued to strengthen inventory and discount controls, partially offsetting the aforementioned adverse effects. (Editor: Chang Chun-mao) 1150514