CSBC Corp, Taiwan (台灣國際造船) yesterday reported net losses of NT$965 million (US$33.46 million) in the first three quarters, 21 percent larger than net losses of NT$795 million last year, due to delays in the delivery of raw materials during the COVID-19 pandemic and the appreciation of the New Taiwan dollar against the US dollar.
While cumulative revenue increased 69.1 percent year-on-year to NT$19.64 billion for the first nine months of this year, CSBC’s costs expanded 69.7 percent to NT$20.37 billion, resulting in a gross loss of NT$733 million, up 87 percent from a gross loss of NT$391 million last year, the shipbuilder told an investors’ conference in Taipei.
“It was not a rosy performance,” CSBC president Tseng Kuo-cheng (曾國正) said. “Our construction work was seriously affected by delays in raw material deliveries during the pandemic and many of our foreign engineers could not come to Taiwan as scheduled.”
Photo: Kao Shih-ching, Taipei Times
Earlier this year, the firm had needed to import some materials from Wuhan, China, but transportation at the epicenter of the pandemic was completely halted due to lockdown measures, Tseng said.
“A delay in building one vessel had a domino effect on the construction of other vessels, as we have limited docking capacity,” he said.
The company calculates its revenue based on construction progress, so delays slowed revenue growth and increased operating costs, Tseng added.
The company was also hurt by a strong NT dollar, as most commercial shipbuilding contracts are denominated in US dollars and commercial shipbuilding makes up 30 percent of CSBC’s total sales, Tseng said.
CSBC had forecast that the exchange rate to the US dollar would stay at about NT$30.5, but the NT dollar’s unexpected appreciation to NT$28.5 is expected to cost the company NT$400 million in revenue, he said.
“Most of our orders have fixed prices,” CSBC executive vice president Mike Chou (周志明) said. “We tried to include in contracts that the price would be adjusted based on fluctuations in the exchange rate, but few buyers were willing to accept that, as no one likes to take on foreign-exchange risks.”
To avoid delays in raw materials, CSBC has diversified imports of raw materials, as it does not seem like the pandemic will slow down anytime soon, Tseng said.
For next year, the company plans to further reduce the number of commercial shipbuilding contracts — which have a low margin — to 22 percent of total revenue, CSBC chairman Cheng Wen-lon (鄭文隆) said, adding that the reduction would allow the company to focus on high-margin orders, such as 2,800 twenty-foot equivalent unit container vessels.
“To regain momentum, the company will focus more on government projects, such as military vessels, and offshore marine construction,” Cheng said.
The company has gained government approval to issue 450 million new shares, an injection of NT$7 billion, boosting its paid-in capital to NT$10 billion, he said.
RETAIL BANKING EXIT: Clients are concerned whether their rights would be protected, while employees were caught by surprise as the bank had just upgraded its services Citibank Taiwan Ltd (花旗台灣) yesterday said that credit card clients could continue using their cards as operations would continue normally until it sells its consumer banking business. As of February, the bank had 2.86 million credit cards in circulation in Taiwan, of which 2.17 million had been used in the past six months, ranking it sixth among all banks, data from the Financial Supervisory Commission showed. Credit card spending by Citibank clients totaled NT$15.66 billion (US$552.6 million) in February, also ranking sixth among banks in Taiwan. Citibank was the only foreign bank that made it into the top six. Customers should not
PANDEMIC EFFECT: Chromebook shipments in the first quarter more than tripled from a year earlier, driven primarily by educational institutions in North America Despite a semiconductor shortage, global PC shipments in the first quarter of this year increased 32 percent from a year earlier, preliminary data from research firm Gartner Inc showed. Shipments in the January-to-March period totaled 69.87 million units from 52.93 million units a year earlier, Gartner said in a report on Monday last week. The quarterly increase in shipments marked the fastest annual growth since it began tracking the PC market in 2000, Gartner said. “This growth should be viewed in the context of two unique factors: comparisons against a pandemic-constrained market and the current global semiconductor shortage,” Gartner research director Mikako Kitagawa
NO MONEY LAUNDERING: Banking Bureau Deputy Director-General Lin Chih-chi said transactions of more than NT$500,000 conducted in cash would need to be reported The Financial Supervisory Commission is to set up new money laundering regulations for the nation’s cryptocurrency exchanges from July 1, requiring them to report transactions valued at more than NT$500,000 (US$17,770), the commission said yesterday. The move came after the Executive Yuan earlier this month demanded that the commission establish regulations to prevent money laundering in the cryptocurrency industry. The cryptocurrency industry includes local trading platforms for cryptocurrencies, cryptocurrency wallet providers and firms that conduct security token offerings, the Executive Yuan said. The commission plans to require cryptocurrency exchanges to report any transaction of more than NT$500,000 conducted in cash, or an equivalent
TREASURY REPORT: A US government report urging the central bank to curtail its foreign-exchange intervention, coupled with soaring exports, might lift the NT dollar The New Taiwan dollar yesterday posted its biggest daily advance since December last year after a report by the US Department of the Treasury last week hinted that US President Joe Biden’s administration could exert greater pressure on Taiwan’s central bank to allow the local currency to appreciate. The NT dollar rose 0.5 percent to close at NT$28.205 against the greenback, and was emerging Asia’s best-performing currency for the day. While the Treasury report on Friday did not label Taiwan as a currency manipulator, it said the US would initiate “enhanced bilateral engagement” to address what it considers as “structural undervaluation”