BenQ CEO says SARS cut sales
BenQ Corp (明基電通) chairman Lee Kun-yao (李焜耀), head of the nation's largest mobile-phone maker, said sales may slip 5 percent from the company's NT$23.4 billion ($675 million) forecast for this quarter, dragged down by a slump in China, where SARS has kept shoppers home.
About a fifth of BenQ's revenue comes from China, the world's largest market for handsets.
TCL Mobile Communication Co, China's No. 2 cellphone maker, said it sold 738,700 handsets last month, down 15 percent from March, as people there shunned malls and crowds to avoid contracting SARS.
The effect from SARS on BenQ's sales may be limited to the current quarter as virus infections slow in China and more people venture out, Lee said.
"The China market is catching up,'' Lee said yesterday at the company's annual general meeting.
``People are starting to shop," he said.
Inventories of mobile phones in China started growing in the first quarter before the SARS outbreak, Lee said.
However, he declined to predict when the excess supply will start to fall.
"Everyone thought China was a virgin market," Lee said. "Everyone rushed in."
Taiwan may report export drop
Export orders and factory production probably fell last month for the first time in 14 months as the spread of SARS curbs spending at home and in China, the nation's biggest export market.
Export orders are indicative of shipments in one to three months.
Orders probably declined 1 percent from a year earlier after rising 6.1 percent in March, according to economists.
Industrial output probably fell 2.1 percent following March's 1.6 percent increase.
The falls would be the first since February last year.
"The outbreak of SARS has likely exacerbated the weakness in foreign sales, notably to China," said Rob Subbaraman, an economist at Lehman Brothers Japan Inc.
"SARS has also stymied local consumer demand, as people shunned crowded places," he said.
Land Bank plans loan auction
The Land Bank of Taiwan (土地銀行), the nation's third-largest lender by assets, plans to auction as much as NT$20 billion (US$577 million) of bad loans by October, said executive vice president Ho Wen-hsiung (何文雄).
The state-owned lender wants to cut non-performing loans as a proportion of its total loans to less than 5 percent by the end of this year from 6.6 percent at the end of last year -- which would be in line with the government directive to lower the bad-loan ratio.
That doesn't include loans at risk of turning bad.
"The auction won't be enough. We also have to write off some more loans," Ho said.
Land Bank, which last year sold NT$5 billion of bad loans to Taiwan Asset Management Corp (台灣金聯), is selecting an auction adviser now.
The bad-loan ratio at domestic lenders, including loans at risk of turning bad, fell to 8.6 percent at the end of March from 8.89 percent at the end of December, after the nation's banks accelerated write-offs of troubled loans.
That's equivalent to NT$1.20 trillion of advances, the central bank said on May 15.
Excluding loans at default risk, the non-performing loan-ratio was little changed at 6.1 percent.
NT dollar takes a dip
The New Taiwan dollar yesterday traded lower against its US counterpart, declining NT$0.033 to close at NT$34.690 on the Taipei foreign exchange market.
Turnover was US$355 million.