The Taiwan High Speed Rail Corp (THSRC, 台灣高鐵) has performed well, if not better than many international enterprises, if taxes, interest payments and depreciation costs are taken into account, the Ministry of Transportation and Communications (MOTC) said in a report yesterday.
The assessment was made based on the earnings before interest, taxes, depreciation and amortization (EBITDA) indicator, one of the most universal and comparable performance indicators, which reflects the actual earning potential of a company.
The company’s EBITDA margin reached 56.1 percent last year. That was higher than Hong Kong MTR Corp’s 52.9 percent, the Central Japan Railway Co’s 40.8 percent, Singapore MRT Ltd’s 34 percent, East Japan Railway Co’s 28 percent and West Japan Railway Co’s 20.4 percent.
THSRC’s earnings, after taxes, interest, deprecation and amortization, however, reached a negative 59.6 percent.
Attributing THSRC’s lackluster operating performance to its unreasonable financing structure, the ministry report said that beginning last year, the company’s monthly revenues totaled about NT$2 billion (US$62 mllion), but after deducting operating outlays, the revenues were not enough to make interest and depreciation payments.
The NT$500 billion high-speed line was 80 percent funded through bank debt, leaving a legacy of huge interest payments.
THSRC’s annual report last year said the company’s business turnover was NT$23.05 billion last year, a significant 70.7 percent growth over the previous year. But the company also reported interest payments of NT$17.4 billion and depreciation charges of NT$18.9 billion, which led to an accumulated loss after taxes of NT$25.01 billion.
If the company wants to become profitable, it should seek a reasonable resolution to its interest and depreciation problems, aside from tapping new sources of revenue and cutting expenditure, the ministry said.
In related developments, Susan Chang (張秀蓮), chairwoman of the state-run Taiwan Financial Holding Co (台灣金控) and Bank of Taiwan (台灣銀行), said yesterday that the syndicated loan lenders have lowered the interest rate for the company’s NT$308.3 billion in first-round syndicated loan to 2.6 percent.
If there was still room for further cuts, it would probably be within 1 percentage point, and would be expected to begin from next month, she said.
Meanwhile, Chinese Nationalist Party (KMT) Legislator Chen Chieh (陳杰) said THSRC’s five major shareholders should serve as guarantors when the second-round syndicated loan involving NT$65.5 billion is granted.
Another concern is the extraordinarily high salaries THSRC top executives receive, even though the company has been in the red.
Last year’s annual reports said each of the 22 vice presidents were paid more than NT$2 million per year, while each of its three foreign consultants earns NT$10 million a year.
THSRC spokesman Ted Chia (賈先德) said the three foreign executives were professionals that many international firms have been scrambling to recruit.
Chia said there was still a lot of work since the high speed rail became operational, including training and development of drivers and other staff, equipment maintenance, marketing, engineering, and the three have been very helpful in the company’s operations.
NEW IDENTITY: Known for its software, India has expanded into hardware, with its semiconductor industry growing from US$38bn in 2023 to US$45bn to US$50bn India on Saturday inaugurated its first semiconductor assembly and test facility, a milestone in the government’s push to reduce dependence on foreign chipmakers and stake a claim in a sector dominated by China. Indian Prime Minister Narendra Modi opened US firm Micron Technology Inc’s semiconductor assembly, test and packaging unit in his home state of Gujarat, hailing the “dawn of a new era” for India’s technology ambitions. “When young Indians look back in the future, they will see this decade as the turning point in our tech future,” Modi told the event, which was broadcast on his YouTube channel. The plant would convert
Nanya Technology Corp (南亞科技) yesterday said the DRAM supply crunch could extend through 2028, as the artificial intelligence (AI) boom has led the world’s major memory makers to dramatically reduce production of standard DRAM and allocate a significant portion of their capacity for high-bandwidth memory (HBM) chips. The most severe supply constraints would stretch to the first half of next year due to “very limited” increases in new DRAM capacity worldwide, Nanya Technology president Lee Pei-ing (李培瑛) told a news briefing. The company plans to increase monthly 12-inch wafer capacity to 20,000 in the first half of 2028 after a
Property transactions in the nation’s six special municipalities plunged last month, as a lengthy Lunar New Year holiday combined with ongoing credit tightening dampened housing market activity, data compiled by local land administration offices released on Monday showed. The six cities recorded a total of 10,480 property transfers last month, down 42.5 percent from January and marking the second-lowest monthly level on record, the data showed. “The sharp drop largely reflected seasonal factors and tighter credit conditions,” Evertrust Rehouse Co (永慶房屋) deputy research manager Chen Chin-ping (陳金萍) said. The nine-day Lunar New Year holiday fell in February this year, reducing
Zimbabwe’s ban on raw lithium exports is forcing Chinese miners to rethink their strategy, speeding up plans to process the metal locally instead of shipping it to China’s vast rechargeable battery industry. The country is Africa’s largest lithium producer and has one of the world’s largest reserves, according to the US Geological Survey (USGS). Zimbabwe already banned the export of lithium ore in 2022 and last year announced it would halt exports of lithium concentrates from January next year. However, on Wednesday it imposed the ban with immediate effect, leaving unclear what the lithium mining sector would do in the
RSS