State-run Chinese Petroleum Corp (CPC,
"We expect to move into the red this year for the first time, if crude oil prices remain at the current level," Liao Tsang-long (廖滄龍), deputy director of CPC's public relations division, said yesterday.
CPC saw a deficit of NT$2.51 billion (US$75.7 million) last month, compared with pretax earnings of NT$1.73 billion during the same time last year, according to company figures.
For the first eight months of the year, CPC reported pretax earnings of NT$13.69 billion, a 17.8 percent decline from a year ago, but NT$3.21 billion more than the goal set by the government, because of increased sales as well as savings in operating costs, according to the company.
CPC reached the annual target set by the government in June, as the company saw a jump in profits from sales of oil and petrochemical products to the overseas market, Liao said. But the gain will be quickly eroded over the next two months, he said.
To stabilize domestic consumer prices, the government demanded that CPC not raise wholesale prices through the end of the year, after privately owned Formosa Petrochemical Corp (台塑石化) raised wholesale gasoline prices by NT$2.4 per liter late last month.
As Formosa has refused to cancel the hike, the over 500 gas stations buying Formosa's oil have had to reflect the increase in retail prices starting Wednesday, which led daily sales to plummet by 80 percent, said Kao Fu-lai (
Sales at Formosa for the first eight months of the year jumped by 27.43 percent to NT$269.6 billion. The company's after-tax earnings for the first half of the year reached NT$30.83 billion.
Formosa's price hike prompted many customers to switch to CPC, causing its daily oil supply to rise by 5 percent, but CPC is still losing about NT$2 per liter, Liao said.
CPC's last price increase was on Aug. 2, when the company raised wholesale gasoline prices by NT$1.5 per liter. At the time crude oil had hit US$62.30 per barrel.
US crude oil futures for delivery next month closed up US$0.60 at US$66.80 per barrel yesterday, and are likely to climb further with Hurricane Rita threatening Gulf of Mexico oil and gas production.
"We will try to cut our costs to sustain company operations," Liao said. "After all, easing consumer prices is a state-run company's responsibility."
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San