Wed, Apr 29, 2009 - Page 11 News List

[BUSINESS BRIEFS]

STAFF WRITER, WITH AGENCIES

China Steel posts loss

China Steel Corp (中鋼), the nation’s largest and only integrated steel maker, posted a second straight quarterly loss in the first three months of the year because of weakening demand and falling prices, it said yesterday.

The first-quarter loss was NT$7.18 billion (US$212 million), or NT$0.59 per share, compared with a profit of NT$11.7 billion, or NT$0.98 in earnings per share, a year earlier, the Kaohsiung-based company said in a statement.

But the first-quarter loss was nearly halved from a loss of NT$15.5 billion the company posted for the fourth quarter of last year.

The company said the losses could narrow further in the second quarter if raw material prices hold steady after annual iron ore negotiations conclude and steel prices stop falling, the statement said.

In the first quarter, revenue dropped 36 percent to NT$36.6 billion from a year ago, while sales volume fell 37 percent year-on-year to 1.66 million tonnes, it said.

China Steel is scheduled to announce prices for domestic customers tomorrow. The ­Kaohsiung-based company cut domestic prices by 14 percent in the April-May period.

Winbond reports loss

Winbond Electronics Corp (華邦電子), the nation’s fifth-largest memory chip maker, yesterday posted a net loss of NT$5.22 billion (US$154 million), or NT$1.43 per share, in the first quarter, a company filing showed.

Revenue was NT$3.13 billion in the first quarter, down 17 percent from the previous quarter.

The Taichung-based company attributed the decline to the weakening average selling price of commodity DRAM, losses on the disposal of investment and inventory write-downs caused by the insolvency of its German partner Qimonda AG, the company said in the stock exchange filing.

The company said it is ­optimistic about its second-quarter performance, as stable demand in consumer electronics in China is likely to boost its sales in specialty RAM chips and NOR flash chips.

In addition, improved migration in process technology at the company’s 12-inch fabs is expected to help cut production costs, the company said.

Cathay offers to buy back bonds

Cathay United Bank Co (國泰世華銀行) offered to buy back US$175 million of its 5.5 percent subordinated bonds maturing in 2020 at a discount to face value.

The lender, a unit of Cathay Financial Holding Co (國泰金控), on April 14 offered to buy back US$125 million of the debt. It hired JPMorgan Chase & Co to manage a modified Dutch auction, which will close at midnight New York time on May 12.

Taipei-based Cathay United will pay between US$0.82 and US$0.92 plus interest to investors who accept the buyback by April 27. Those who tender after April 27 and before May 12 will receive US$0.03 less than the final price.

NT dollar weakens on flu

The New Taiwan dollar weakened for a second day on concern the growing threat of swine flu will heighten investor risk aversion for emerging markets.

The NT dollar fell 0.2 percent to NT$33.795 as of the 4pm close, Taipei Forex Inc said.

“The reflex reaction is the flight to the US dollar,” said David Cohen, director of Asian forecasting at Action Economics in Singapore.

Cohen expects the local currency to strengthen to NT$32 by the end of the year as exports increase on a revival in global demand.

Yesterday, Goldman Sachs raised its economic growth forecast for Taiwan for next year to 3.5 percent from 2.5 percent as improved relations with China start to benefit businesses.

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