Chunghwa Telecom Co (
Chunghwa Telecom projected losses from the contract would amount NT$1.5 billion (US$49.9 million) based on the assumption that the New Taiwan dollar would rise to an average of NT$30 in the next 10 years. The firm said the losses were still within the acceptable range.
But investors are concerned about the impact on the company's bottom line as it is difficult to expect a jump in profits for local telecoms given the country's saturatured market.
"Foreign losses will increase because of rising New Taiwan dollar [against the greenback]," chief financial officer Joseph Shieh (謝劍平) told an investor's conference yesterday.
If the NT dollar appreciated to NT$28 against the US dollar, the losses would widen to NT$3.5 billion from NT$1.5 billion estimated previously, he said.
"We will not consider unwinding the contract as the impact will subside over time. We will devise remedy measures at the proper time," Shieh said, stressing that those losses are unrealized valuation losses.
The NT dollar dropped to NT$30.18 against the greenback yesterday, down NT$0.17 from a 10-year high of NT$30.01 on Wednesday.
Chunghwa Telecom posted its net income for last year yesterday, NT$48.25 billion on consolidated base, an increase of 7.5 percent compared to NT$44.89 billion in 2006. Revenues expanded by 7 percent to NT$197.39 billion at an annual pace.
Chunghwa Telecom said earlier this month that it had lost NT$4 billion from the foreign exchange derivatives contract over the past six months.
As the company takes a more aggressive stance to revitalize under-developed assets via a newly established property development firm, investors yesterday were curious about how this would affect the firm's profits.
Shieh said Chunghwa Telecom would book -- at a minimum -- NT$2.25 billion in profits in the next two to three years from two land development projects.
He said the company was working with local construction firms Ruentex Development Co (潤泰創新國際) and Kindom Construction Co (冠德建設) to build housing complexes and office building in Greater Taipei area.
Chunghwa Telecom has 440 hectares of land, mostly in the northern part of the country, and around 10 percent was ready for immediate development, he said.
Separately, Chunghwa Telecom said prosecutors and investigators have visited its headquarters to ask the company to provide more written information about a bid-rigging probe involving its electronics suppliers.
Two companies are suspected of rigging as many as 50 electronics procurement bids arranged by Chunghwa Telecom between 2003 and 2005.
The deals were worth as much as NT$900 million, the Central News Agency (CNA) reported.
Chunghwa Telecom declined to confirm the numbers in the CNA report, but said it would cooperate with the probe.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
RSS