Wed, Sep 21, 2016 - Page 12 News List

THSRC outlines plans for improving services, finances

By Ted Chen  /  Staff reporter

Taiwan High Speed Rail Corp (THSRC, 台灣高鐵) yesterday outlined plans for improving its service quality, ridership numbers and financial condition at an earnings conference ahead of the company’s listing on the Taiwan Stock Exchange next month.

The high-speed rail service, which was developed as a build-operate-transfer (BOT) project, sustained years of losses and incurred mounting debts since its launch in 2007 before it turned profitable in 2014.

“The company has overcome tremendous hurdles in the past and its finances are stabilizing as depreciation pressure diminishes,” THSRC chairman Victor Liu (劉維琪) said.

The company, which is listed on the Taipei Exchange’s Emerging Stock Board, plans to issue 23 million common shares that would raise an estimated NT$264.5 million (US$8.43 million), it said.

Under the restructuring plan, the company is reducing its share capital by 60 percent, and redeeming its preferred shares and 60 percent of its common shares.

“With passenger count exceeding 50 million per year, higher than the break-even point of 43 million, we expect the company to maintain its growth due to continued expansion in ridership,” Liu said.

Liu said that passenger counts at the new stations in Miaoli, Changhua and Yunlin have increased total ridership by 2.3 percent, higher than the projected 1 percent, despite speculation that the investments would not generate returns.

To continue improving ticket sales, which make about 98 percent of the company’s earnings, Liu said priority would be given to improving the services for homebound travelers returning to Yunlin and Miaoli from the industrial centers in Hsinchu and Taichung, adding that Changhua has been designated as a hub for day-long excursions in central Taiwan for local tourists.

The company generates a cash inflow of about NT$15 billion per year, which would enable it to pay its debts estimated at about NT$300 billion, Liu said.

Last year, a government-backed financial restructuring plan allowed the company to write off accumulated losses and post a net income of NT$20.87 billion, or earnings per share of NT$7.19, for last year on sales of NT$51.9 billion, the company said.

THSRC would also pay dividends of NT$0.65 per share this year, it said.

The company would benefit from reduced feedback funds owed to the government as it relinquishes development rights for plots of land adjacent to high-speed rail stations, THSRC finance division vice president Eleanore New (鈕心惟) said.

Feedback funds have also been reduced by NT$12 billion to make up for government-mandated ticket price cuts for certain categories of passengers, New added.

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