CSBC Corp, Taiwan (CSBC, 台灣國際造船), the nation’s largest ship manufacturer, said yesterday that the preliminary income losses from canceled orders by Israeli client Zim Integrated Shipping Services Ltd were estimated to reach NT$1 billion (U$29.5 million) this year.
The Kaohsiung-based company said it expected to book more than NT$1 billion in losses next year as a result of the cancelation, while adding that the turn of events would not affect its business next year through 2012.
“We are in the midst of soliciting new contract orders from international customers, as well as participating in government projects to even out our revenue stream,” Lee Shu-ling (李叔麟), chief secretary of the board of directors at CSBC, told the Taipei Times by telephone yesterday.
Furthermore, CSBC is working on the Taiwanese navy’s coastal defense ships, Lee said.
As part of the penalty clause included in the contract with Zim, the Israeli company will be forfeiting the 10 percent deposit it made on six 1,700-TEU (20-foot equivalent unit) container vessels as well as any associated raw material costs CSBC has incurred so far in the production of the vessels.
Lee said the company had yet to begin work on the vessels. Work had been expected to begin at its Keelung production site in November.
In a statement to the Taiwan Stock Exchange on Tuesday, CSBC informed investors of the canceled order totaling US$220.4 million. As a result of the cancelation, CSBC now has 52 orders on its books.
Last year, CSBC’s revenues reached NT$35.65 billion, a year-on-year increase of 22.4 percent. Earnings last year reached 1.07 billion, an earnings per share estimated at NT$1.61.
At the company’s pre-IPO road show in December, CSBC chairman Cheng Wen-lon (鄭文隆) said revenue this year would be between NT$35 billion and NT$38 billion, with profit estimated at between NT$2.2 billion and NT$2.4 billion, taking into account declining steel prices and favorable exchange rates.
At the time, Cheng said the shipbuilder was fully booked until 2012.
Lee refused to confirm those figures yesterday.
Despite early downward trading in the morning, CSBC shares closed up NT$0.55, or 1.77 percent, to NT$28.80 on the Taiwan Stock Exchange.
CSBC mainly builds container vessels, oil tankers, bulk carriers, naval ships and oil drilling rigs. Its other business lines include commercial and naval ship repairs, machinery production engineering and smoke stacks for power plants.
The company has enjoyed the most successful turnaround among all of Taiwan’s state-owned companies, with pre-tax income of NT$2.5 billion in 2007, surpassing its budget target by NT$31 million.
In December, CSBC unveiled a plan to expand its ship repair services to meet a possible rise in repair demand following the opening of direct shipping links with China on Dec. 15.
ADDITIONAL REPORTING BY CNA
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his