The Taiwan High Speed Rail Corp (THSRC, 台灣高鐵) has performed well, if not better than many international enterprises, if taxes, interest payments and depreciation costs are taken into account, the Ministry of Transportation and Communications (MOTC) said in a report yesterday.
The assessment was made based on the earnings before interest, taxes, depreciation and amortization (EBITDA) indicator, one of the most universal and comparable performance indicators, which reflects the actual earning potential of a company.
The company’s EBITDA margin reached 56.1 percent last year. That was higher than Hong Kong MTR Corp’s 52.9 percent, the Central Japan Railway Co’s 40.8 percent, Singapore MRT Ltd’s 34 percent, East Japan Railway Co’s 28 percent and West Japan Railway Co’s 20.4 percent.
THSRC’s earnings, after taxes, interest, deprecation and amortization, however, reached a negative 59.6 percent.
Attributing THSRC’s lackluster operating performance to its unreasonable financing structure, the ministry report said that beginning last year, the company’s monthly revenues totaled about NT$2 billion (US$62 mllion), but after deducting operating outlays, the revenues were not enough to make interest and depreciation payments.
The NT$500 billion high-speed line was 80 percent funded through bank debt, leaving a legacy of huge interest payments.
THSRC’s annual report last year said the company’s business turnover was NT$23.05 billion last year, a significant 70.7 percent growth over the previous year. But the company also reported interest payments of NT$17.4 billion and depreciation charges of NT$18.9 billion, which led to an accumulated loss after taxes of NT$25.01 billion.
If the company wants to become profitable, it should seek a reasonable resolution to its interest and depreciation problems, aside from tapping new sources of revenue and cutting expenditure, the ministry said.
In related developments, Susan Chang (張秀蓮), chairwoman of the state-run Taiwan Financial Holding Co (台灣金控) and Bank of Taiwan (台灣銀行), said yesterday that the syndicated loan lenders have lowered the interest rate for the company’s NT$308.3 billion in first-round syndicated loan to 2.6 percent.
If there was still room for further cuts, it would probably be within 1 percentage point, and would be expected to begin from next month, she said.
Meanwhile, Chinese Nationalist Party (KMT) Legislator Chen Chieh (陳杰) said THSRC’s five major shareholders should serve as guarantors when the second-round syndicated loan involving NT$65.5 billion is granted.
Another concern is the extraordinarily high salaries THSRC top executives receive, even though the company has been in the red.
Last year’s annual reports said each of the 22 vice presidents were paid more than NT$2 million per year, while each of its three foreign consultants earns NT$10 million a year.
THSRC spokesman Ted Chia (賈先德) said the three foreign executives were professionals that many international firms have been scrambling to recruit.
Chia said there was still a lot of work since the high speed rail became operational, including training and development of drivers and other staff, equipment maintenance, marketing, engineering, and the three have been very helpful in the company’s operations.
Anna Bhobho, a 31-year-old housewife from rural Zimbabwe, was once a silent observer in her home, excluded from financial and family decisionmaking in the deeply patriarchal society. Today, she is a driver of change in her village, thanks to an electric tricycle she owns. In many parts of rural sub-Saharan Africa, women have long been excluded from mainstream economic activities such as operating public transportation. However, three-wheelers powered by green energy are reversing that trend, offering financial opportunities and a newfound sense of importance. “My husband now looks up to me to take care of a large chunk of expenses,
SECTOR LEADER: TSMC can increase capacity by as much as 20 percent or more in the advanced node part of the foundry market by 2030, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to lead its peers in the advanced 2-nanometer process technology, despite competition from Samsung Electronics Co and Intel Corp, TrendForce Corp analyst Joanne Chiao (喬安) said. TSMC’s sophisticated products and its large production scale are expected to allow the company to continue dominating the global 2-nanometer process market this year, Chiao said. The world’s largest contract chipmaker is scheduled to begin mass production of chips made on the 2-nanometer process in its Hsinchu fab in the second half of this year. It would also hold a ceremony on Monday next week to
State-run CPC Corp, Taiwan (CPC, 台灣中油) yesterday signed a letter of intent with Alaska Gasline Development Corp (AGDC), expressing an interest to buy liquefied natural gas (LNG) and invest in the latter’s Alaska LNG project, the Ministry of Economic Affairs said in a statement. Under the agreement, CPC is to participate in the project’s upstream gas investment to secure stable energy resources for Taiwan, the ministry said. The Alaska LNG project is jointly promoted by AGDC and major developer Glenfarne Group LLC, as Alaska plans to export up to 20 million tonnes of LNG annually from 2031. It involves constructing an 1,290km
NEXT GENERATION: The company also showcased automated machines, including a nursing robot called Nurabot, which is to enter service at a Taichung hospital this year Hon Hai Precision Industry Co (鴻海精密) expects server revenue to exceed its iPhone revenue within two years, with the possibility of achieving this goal as early as this year, chairman Young Liu (劉揚偉) said on Tuesday at Nvidia Corp’s annual technology conference in San Jose, California. AI would be the primary focus this year for the company, also known as Foxconn Technology Group (富士康科技集團), as rapidly advancing AI applications are driving up demand for AI servers, Liu said. The production and shipment of Nvidia’s GB200 chips and the anticipated launch of GB300 chips in the second half of the year would propel
RSS