CSBC Corp, Taiwan (CSBC, 台灣國際造船), the nation’s largest ship manufacturer, said yesterday it had confidence in its financial outlook, adding it expected to reach between NT$34 billion (US$1.02 billion) and NT$35 billion in revenues by the end of this year.
As of September, the company had already reported pre-tax earnings of NT$26.6 billion, CSBC chairman Cheng Wen-lon (鄭文隆) told investors at a road show yesterday ahead of the shipbuilder’s initial public offering (IPO) scheduled for Dec. 22.
The state-owned enterprise projects revenues of between NT$35 billion and NT$38 billion for next year, with profit estimated at between NT$2.2 billion and NT$2.4 billion, taking into account declining steel prices and favorable exchange rates, Cheng said.
Orders are filled through 2011 and the company is in talks with customers from Germany, Holland, Japan and CPC Corp, Taiwan (台灣中油) for more orders, he said.
Following Taiwan Fertilizer Co (台肥) and Taiwan Salt Co (Taisalt, 台鹽), CSBC is the latest state-owned enterprise to go public.
“The proceeds of the IPO will be used in research and development for fuel-efficient and environment-friendly ships and containers. They will also be used to update our existing equipment and provide intensive training for our employees,” Cheng said.
“Our goal in privatizing is to build CSBC into a world-class shipping brand, known for its design and manufacturing excellence,” he said.
At present, CSBC produces about 1 percent of ships worldwide. Last year, the Kaohsiung-based firm built 16 ships, or 0.8 percent, out of the global output of 2,108 ships.
In terms of dead weight tonnes (DWT), CSBC registered 0.9 DWT, or 1.13 percent of global output, indicative of an expertise in heavy duty, large ships, Clarkson Research Services said.
“About 95 percent of our revenues come from shipbuilding and 5 percent from repair and maintenance. For repair work, 35 percent of customers are from abroad,” Cheng said.
CSBC has two factory sites, the main one in Kaohsiung and a satellite in Keelung. Annually, the state-owned enterprise produces 12 ships and repairs between 70 and 80 ships in Kaohsiung, while building six ships and repairing between 45 and 50 in Keelung, the company said.
CSBC’s capital base is estimated at NT$6.66 billion, with the government owning 99.4 percent of the company’s equity. For the IPO, CSBC is releasing 51 percent of its equity to the public, for a total of 339,728,000 shares, of which 119,904,000 will be employee shares and 219,824,000 for public circulation.
Of the public shares, 60 percent, or 131,895,000, will be sold through a US-style auction, in which the highest bidder gets the prize, while 40 percent, or 87,928,000 shares, will be sold through retail channels.
From today through Friday, underwriter Fubon Securities Co (富邦證券) will be collecting bids from individual clients and institutional investors for a minimum of 1,000 shares and a starting bid of NT$13.31 per share for the auction. Retail channels will be available to take orders from Dec. 8 through Dec. 10.
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