Fri, Dec 25, 2009 - Page 12 News List

Profits of high-tech firms significantly up, S&P says

By Lisa Wang  /  STAFF REPORTER

Taiwanese high-tech companies increased cash flow and significantly improved profitability last quarter, signaling that the nation’s high-tech sector is on track to a full recovery in terms of credit, Standard & Poor’s Ratings Services (S&P) said yesterday.

“The island’s high-tech firms proved they are highly flexible in adjusting their cost structures to meet the obstacles brought by the global economic slowdown,” credit analyst Raymond Hsu (許智清) said in a report.

“Some top-ranking domestic high-tech companies have even strengthened their market positions through better cost efficiency and capital structure than their foreign peers,” Hsu said.

He did not give further details about specific company’s performance.

On Dec. 12, Fitch Ratings raised its outlook on AU Optronics Corp (友達光電), to “stable” from “negative,” saying improving profitability had helped strengthen the company’s ability to repay debt.

Recent consolidation involving Taiwan’s high-tech firms has improved the sector’s competitiveness, Hsu said.

However, uncertainty over government policy toward investment in China and over China’s rapidly evolving operating environment would pose problems for some high-tech firms, the report said.

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