Taipower endures heavy losses

State-run Taiwan Power Co (Taipower, 台電), Taiwan's sole electricity supplier and a company that normally contributes large amounts of revenue to the national coffers, reported steep losses for the first seven months of the year, yesterday.

Taipower posted a pre-tax loss of NT$2.06 billion for the first seven months of the year, citing the rising fuel costs and damage caused by Tropical Storm Mindulle that struck the nation earlier last month, a statement released by the the Commission of National Corporations under the Ministry of Economic Affairs (MOEA) said.

The price of coal that Taipower imports from Australia surged from US$25 per tonne to US$60 per tonne, Taipower spokesman Lee Jiin-tyan (李錦田) said.

"Despite a steep increase in expenditures, we will not raise electricity rates this year as was stated earlier," Lee said.

The company has revised its financial forecast for the year to NT$7.5 billion, nearly 50 percent lower than its previous forecast, Lee said. But even this target may be difficult to hit, he said.

going private

As the company's privatization timetable set for the end of next year might be delayed, Lee said it could save up to NT$6.9 billion from a retirement preparation fund.

Taipower is attempting to reduce operating costs and bolster capacity at its thermal power plants, Lee said.

advantage CPC

Higher fuel costs, however, are benefitting state-run Chinese Petroleum Corp (CPC, 中油), which realized record profits over the last seven months, the MOEA said.

Even as oil prices rose, CPC achieved record pre-tax profit of NT$14.93 billion, or 120.4 percent of its fiscal-year target of NT$12.4 billion.

"We hope surging international oil prices will ease," said Liao Tsang-long (廖滄龍), CPC's deputy director of industrial relations. "Despite the pressure, CPC has no plans to boost prices this month."

CPC has already hiked oil prices three times this year to reflect the rising costs.

Wu Fong-sheng (吳豐盛), executive director of the commission, said that although these companies' business operations this year are more or less affected by international circumstances, the commission has urged them to reevaluate their policies in a bid to turn in profits by the year's end.

It required Taipower, for example, to make electricity transmission more efficient, Wu said.

HEAVY INDUSTRY

"We're very pleased that Tang Eng Iron Works Corp (唐榮) and China Shipbuilding Corp (中船) were able to finally turn profitable," he said.

Aided by economic recovery and brisk demand from China, Tang Eng Iron Works Corp (唐榮) raked in NT$1.49 billion in pre-tax profits for the first seven months -- or 212 percent of its fiscal-year forecast of NT$702 million.

China Shipbuilding Corp (中船) had pre-tax profit of NT$381 million, representing 119 percent of this year's 12-month target set by the government.

Taiwan Sugar Corp (台糖) saw a pre-tax profit of NT$3.69 billion for the first seven months of the year, but the profit is mostly from selling land holdings.

IN THE RED

Money losers include Taiwan Water Supply Corp (台灣自來水) and Aerospace Industrial Development Corp (AIDC, 漢翔航空).

The water company saw losses of NT$286 million in July because of a rise in raw-materials costs. The company reported NT$60 million in aggregate losses in the January-July period.

AIDC reported losses of NT$254 million for the first seven months, while the 12-month goal is set at NT$236 million in pre-tax profits.