Only one-fifth of listed firms post better profits

Impacted by a slower economy and the implementation of new accounting rules, only about 20 percent of local companies listed on the Taiwan Stock Exchange reported profit gains for the first quarter, a Chinese-language newspaper reported yesterday, citing statistics from the stock exchange.

Of the 510 listed companies that have completed filing their first-quarter financial reports, only 111 reported profit gains from a year ago, while the rest saw profits narrow, the report said, citing stock exchange data.

Traditional industries -- particularly the construction, transportation, plastics and petrochemical sectors -- reported higher profit growth in the three months through March, the report said. The finance sector, China-play companies and high-tech firms such as chipmakers and flat-panel makers -- formerly a favorite target of investors -- saw results worsen from a year ago, the report said.

Companies reporting robust performance in the first quarter in terms of earnings per share (EPS) were High Tech Computer Corp (宏達電子), which reported earnings of NT$5.5 per share, followed by MediaTek Inc (聯發科技) with EPS of NT$3.72, and Yulon Motor Co (裕隆汽車), with NT$3.42.

Most of the remaining 200 companies that have not yet revealed their earnings results may see declining profits, as companies with poor performance usually complete their filings at the last minute, the report said. This could mean that the percentage of companies reporting profit growth may even slide to 15 percent.

The deadline for listed companies to file their financial reports for the first quarter is today.

The report attributed the dire results to a sagging economic outlook and new accounting rules.

Taiwan's economic growth is estimated to shrink from 5.71 percent last year to 4.21 percent this year, mainly affected by a slowing global economy, according to the government statistics bureau.

The new accounting rules, known as the Statement of Financial Accounting Standard No. 35, requires all publicly traded companies in Taiwan to list asset impairments stemming from long-term investments or decreased goodwill from mergers. The change has reduced book values and net values, and dragged down share prices at some companies.