Taiwan Ratings Corp (中華信評) has downgraded the credit outlook for Taipei Financial Center Corp (台北金融大樓) from “stable” to “negative,” as the operator of the Taipei 101 skyscraper has seen a slump in tourists and shoppers.
The local arm of S&P Global Ratings said the negative outlook reflects the likely deterioration in the company’s credit profile this year and uncertainty over a recovery.
A dire lack of foreign tourists would diminish revenue from its observatory and tourist spending at its shopping mall, the agency said.
Photo: Liao Chen-huei, Taipei Times
The number of foreign visitors dropped close to zero over the past few weeks due to border controls and flight bans to curb the spread of COVID-19.
“We expect international travel to remain muted for six more months, as the number of infections is still on the rise worldwide,” Taiwan Ratings said, expecting a modest recovery toward the end of the year.
That might affect the number of visitors to the observatory and the observation deck’s revenue this year by up to 80 percent, it said.
Local customers have also reduced shopping frequency to avoid infections, it added.
Retail sales at the Taipei 101 shopping center are forecast to drop by 31 to 35 percent given the store’s collection of luxury and fashion brands for which consumption is discretionary in nature, it said.
The office building’s rental income would not be affected by the pandemic, because rental rates are fixed and long-term in nature, it said.
In addition, the Taipei 101 building has built up a strong tenant portfolio, mostly high-profile global firms and large domestic companies that can afford above-average rents, it said.
However, office rent accounts for only 26 percent of overall operating income and would not be sufficient to compensate for the slowdown in other segments, it said.
This story has been modified since it was first published to avoid any inconvenience caused to Taipei Financial Center Corp.
RECORD BUDGET: TSMC does plan to raise its proposed capital expenditure a lot, and could benefit if Intel outsources more of its production to foundries, analysts said Intel Corp’s earnings conference call on Thursday is expected to clarify the US semiconductor giant’s outsourcing production plans, which would be crucial regarding Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) performance, analysts said. “TSMC stands to benefit if Intel outsources more of its fabrication to foundries,” SinoPac Securities Investment Service Corp (永豐投顧) analysts said in a note on Friday. Yuanta Securities Investment Consulting Co (元大投顧) was more cautious, saying that Intel’s contribution initially would be limited, but its outsourcing plans would still highlight TSMC’s leadership in technology, it added. “Intel will continue to manufacture server or high-end central processing units [CPUs], which have higher
MediaTek Inc (聯發科) yesterday announced it would give incentive bonuses totaling NT$1.7 billion (US$59.7 million) to its employees and those at the firm’s major subsidiaries, after the smartphone chip supplier’s revenue hit US$10 billion last year. This is the biggest incentive bonus the Hsinchu-based handset chip designer has ever distributed in its 23-year history. About 17,000 full-time employees of MediaTek and five of its subsidiaries, including Richtek Technology Corp (立錡科技) and Airoha Technology Corp (絡達科技), would receive a “red envelope” of NT$100,000 each, the company said. “Surpassing US$10 billion is just the beginning. We will continue to [grow] on this basis,” MediaTek
TO SPUR REVENUE: The contract chipmaker expects its profit to grow 15 percent this year, outpacing the foundry industry’s projected advance of about 10 percent Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its projected capital spending for this year by 62 percent, a new high, in an attempt to satisfy customer demand for advanced technologies in the production of central processing units, high-performance-computing (HPC) devices and 5G applications. After investing US$17.24 billion last year, TSMC this year plans to spend US$25 billion to US$28 billion on manufacturing equipment and new facilities, including a fab in the US. About 80 percent of the budget would be allocated for developing advanced technologies including 3, 5 and 7-nanometer technologies, the company said. The larger-than-expected capital spending prompted speculation
Norway’s oil and gas reserves have made it one of the world’s wealthiest countries, but its dreams for deep-sea discovery now center on something different. This time, Oslo is looking for a leading role in mining copper, zinc and other metals found on the seabed and in hot demand in green technologies. The country could license companies for deep-sea mining as early as 2023, the Norwegian Ministry of Petroleum and Energy said, potentially placing it among the first countries to harvest seabed metals for electric vehicle batteries, wind turbines and solar farms. However, that could also place it on the front line of