Mon, Apr 17, 2017 - Page 16 News List

Forex losses hurt listed companies last year

EXPORTERS’ HEADACHE:The strength of the New Taiwan dollar remains a concern for businesses, as it appreciated more than 6% against the US dollar in the first quarter

Staff writer, with CNA

Companies listed on the Taiwan Stock Exchange incurred massive foreign-exchange losses last year, as the New Taiwan dollar appreciated about 2.44 percent against the US dollar, the Financial Supervisory Commission said.

The commission said local businesses posted more than NT$130 billion (US$4.24 billion) in foreign-exchange losses after the NT dollar last year ended a three-year losing streak against the greenback.

The commission’s data showed that the financial sector suffered about NT$122 billion in foreign-exchange losses, accounting for about 90 percent of the total, as the nation’s life insurers have a large amount of foreign currency-denominated assets overseas.

When the value of the overseas assets was converted into NT dollars, the strength of the local currency led these life insurers to book significant foreign-exchange losses, the commission said.

The trading and consumer goods industry posted the second-highest foreign-exchange losses last yea, of NT$6.7 billion, followed by the computer and computer peripheral devices sector, which incurred NT$1.4 billion in foreign-exchange losses, the commission said.

Despite the large losses, the combined pre-tax profit of all listed companies rose 2.24 percent year-on-year to NT$2.33 trillion last year, the commission said.

Listed companies on the main board recorded NT$2.21 trillion in pretax profit last year, an increase of 2.25 percent from the same period last year, it said.

The stronger bottom lines reflected a spike in prices in the petrochemical, utility and steel sectors, while strong demand in the global semiconductor sector also drove earnings higher, the commission said.

A stronger NT dollar remains a concern for the nation’s businesses as the currency appreciated more than 6 percent against the US dollar in the first quarter, market analysts said.

For example, Largan Precision Co (大立光), a smartphone camera lens supplier to Apple Inc, reported NT$1.14 billion in foreign-exchange losses in the first quarter, higher than an earlier market estimated loss of NT$800 billion to NT$900 million, which shaved about NT$8 from its earnings per share (EPS).

In the first quarter, Largan posted EPS of NT$36.41, a fall of 42 percent from the previous quarter.

In addition to the significant foreign-exchange losses, the slow season is also dragging Largan’s profitability.

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