Elitegroup Computer Systems Co (ECS, 精英電腦) shares yesterday plunged by the 10 percent daily limit to NT$17.55 after the company said it is to book US$90.84 million in bad debt for last quarter due to overdue payments from Venezuela.
At a Monday night news conference at the Taiwan Stock Exchange, the motherboard maker said that payments for project-based PC and tablet orders from Venezuela were smooth and on time until the beginning of this year, when international oil prices dropped significantly.
The company won a bid in 2014 for a Venezuelan government order for more than 2 million PCs and educational tablets worth more than US$400 million, ECS chairwoman Lin Kuo Wen-yen (林郭文艷) said.
ECS finished shipping the devices by the end of last year and collected more than US$310 million, Lin Kuo told reporters.
However, the government’s payments slowed and have not arrived on schedule in the past few months, she said.
After several negotiations, the Venezuelan government promised to fulfill its obligations, but said it would prioritize the use of its hard currency to buy food and medial supplies, Lin Kuo said.
Given that ECS cannot be sure it can collect the outstanding balance before the end of the year, the company decided to book the remaining US$90.84 million as a bad debt for the last quarter, translating to about NT$5.2 per share, she said.
ECS’ operations have not been affected by the payment delays, and the company’s cash flow can support its business development throughout this year, she said.
The planned cash dividend of NT$2 per share will still be distributed to shareholders, Lin Kuo said.
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