Higher commodity prices and rising labor costs could bring an end to the recent improvement in operating margins and credit difficulties for the nation’s non-tech firms, Taiwan Ratings Corp (中華信評), a local unit of Standard & Poor’s Ratings Services, said yesterday in a report.
“Most non-tech firms that we rate in Taiwan slightly improved their adequate credit metrics over the past two quarters through deleveraging and capital expenditure cuts,” credit analyst Raymond Hsu (許智清) said in the report.
Taiwan Ratings said rising consumer demand, particularly from China, would continue providing support to Taiwanese chemical, building material and air and maritime transport firms’ operating performance in the next two quarters.
In addition, as worldwide consumer interest in tablet computers and smartphones continues to grow, Taiwanese firms that offer data and other telecommunication services will also see market demand increase significantly in the second half of the year.
“Nonetheless, profitability pressure from high and still-rising commodity prices have constrained non-tech firms’ credit profiles in recent quarters, which we expect to continue throughout 2011,” Hsu said in the report.
The report also said rising production and labor costs could undercut the profitability of non-tech companies and further impact the sector’s credit quality in the following two quarters.
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
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