Fri, Feb 22, 2019 - Page 12 News List

CSBC reduces annual losses by 51.5%, focuses on diversifying income sources

By Kao Shih-ching  /  Staff reporter

CSBC Corp Taiwan (台船) yesterday reported a huge reduction in losses last year, saying it expected to see continued growth for the year ahead, due to an improved production line and more government contracts.

The nation’s only listed shipbuilding firm reported a pretax loss of NT$3.08 billion (US$99.9 million) for the whole of last year, a 51.5 percent drop from NT$6.35 billion in 2017, company data showed.

Sales totaled NT$9.71 billion as of the third quarter last year, down 24 percent from NT$12.7 billion a year earlier, the data showed.

However, its operational costs also declined 32 percent from NT$17.49 billion for the first three quarters of 2017 to NT$11.94 billion for the same period last year, the data showed.

“We tried hard to reduce our losses and increase profit last year, and the contracting losses proved our strategy was successful,”CSBC chairman Cheng Wen-lon (鄭文隆) told an investors’ conference in Taipei.

At its Kaohsiung factory, two cranes crashed into each other and were completely destroyed during a storm in 2014, forcing the firm to halt some of its building projects and creating a “domino effect” that lead to huge losses, Cheng said, adding that foreign-exchange volatility increased the losses.

“Happily, we have stopped the domino effect … and now we can produce ships and vessels on time,” Cheng said.

The firm delivered nine ships and vessels last year and plans to deliver 12 this year, signaling a improvement in productivity, he added.

Cheng declined to say whether the company would be able to break even this year.

The firm’s revenue and operational costs are forecast to improve, he said.

CSBC last year expressed its ambition to diversify income sources to weather a slump in the shipbuilding sectors, aiming to have offshore wind farms, military vessels and container ships each account for a third of its annual revenue by 2025.

The share of revenue from container ships is expected to drop to 75 percent this year from 80 percent last year, while the share from military vessels is forecast to grow to 25 percent from 20 percent, CSBC president Tseng Kuo-cheng (曾國正) said.

The firm expects to see the share of container ship revenue drop to 50 percent next year, Tseng said, adding that the revenue from wind farm construction would jump next year.

As of last month, the company secured 21 government contracts totaling NT$19.5 billion to build the nation’s homegrown submarine fleet, and expects to seize another three contracts totaling NT$18.5 billion to build six 1,000-tonne vessels, 17 100-tonne vessels and four 4,000-tonne vessels, Tseng said.

The firm would also begin delivering 60 pin piles, the key component used to support wind turbines, to Orsted A/S from September, Tseng said.

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