June 22nd 2008
TAIPEI, Taiwan -- State-run Taiwan Power Company (Taipower), Taiwan's only power distributor, posted a net loss of NT$23.25 billion (US$762 million) in 2007 because of the soaring cost of international energy resources, company Chairman Edward Chen said Friday.
"Last year the company spent a total of NT$4.46 trillion, NT$31.25 billion higher than our total revenues of NT$4.15 trillion," Chen said at a shareholders meeting where he announced the company's 2007 results.
"This NT$31.25 billion deficit marked a huge increase of NT$28.42 billion compared with the 2006 deficit of NT$2.81 billion," he added.
An income tax benefit of NT$7.98 billion helped trim the company's net loss in 2007 to NT$23.26 billion, the Taipower chairman said.
Chen attributed the company's woes to skyrocketing international oil and coal prices, with electricity prices, frozen under the former Democratic Progressive Party (DPP) administration since July 2006, unable to reflect the rising costs.
Rapidly, rising oil and coal prices hit the company even harder in the first five months of 2008, during which it posted a pre-tax loss of NT$ 47.9 billion, more than three times the NT$15.5 billion pre-tax loss registered over the same period of 2007.
International prices of crude oil and coal have risen by 46 percent and 50 percent respectively since January 2008 to reach US$130.62 a barrel and US$150 a ton. The two fuels accounted for half of the company's power generation in 2006.
The 5.8 percent increase in electricity prices allowed in July 2006 were the first hikes in 23 years, but with the soaring cost of inputs, the company has been appealing for a new round of price increases.
The new Kuomintang government has agreed to a 12.6 percent hike in electricity prices on July 1 and another 12.6 percent increase on October 1 to reflect the higher cost of raw materials and stem the state-run company's losses.
"The company is also working on ways to boost operational efficiency, with measures including cutting down the procurement price of fuels," Chen said.
Hoping that price adjustments would be made in a more timely fashion in the future, Chen warned that the company would not be able to construct new power-generating facilities should it continue to run a deficit in the coming years.
"The problem will also hurt the company's capital position," he told shareholders.
To make up for the NT$23.26 billion loss, Taipower said it has used the company's NT$1.99 billion legal surplus earned in previous years, as well as another NT$21.26 billion from the company's legal reserve.
Source: http://www.chinapost.com.tw/taiwan/%20business/2008/06/22/162096/Taipower-suffered.htm
TAIPEI, Taiwan -- State-run Taiwan Power Company (Taipower), Taiwan's only power distributor, posted a net loss of NT$23.25 billion (US$762 million) in 2007 because of the soaring cost of international energy resources, company Chairman Edward Chen said Friday.
"Last year the company spent a total of NT$4.46 trillion, NT$31.25 billion higher than our total revenues of NT$4.15 trillion," Chen said at a shareholders meeting where he announced the company's 2007 results.
"This NT$31.25 billion deficit marked a huge increase of NT$28.42 billion compared with the 2006 deficit of NT$2.81 billion," he added.
An income tax benefit of NT$7.98 billion helped trim the company's net loss in 2007 to NT$23.26 billion, the Taipower chairman said.
Chen attributed the company's woes to skyrocketing international oil and coal prices, with electricity prices, frozen under the former Democratic Progressive Party (DPP) administration since July 2006, unable to reflect the rising costs.
Rapidly, rising oil and coal prices hit the company even harder in the first five months of 2008, during which it posted a pre-tax loss of NT$ 47.9 billion, more than three times the NT$15.5 billion pre-tax loss registered over the same period of 2007.
International prices of crude oil and coal have risen by 46 percent and 50 percent respectively since January 2008 to reach US$130.62 a barrel and US$150 a ton. The two fuels accounted for half of the company's power generation in 2006.
The 5.8 percent increase in electricity prices allowed in July 2006 were the first hikes in 23 years, but with the soaring cost of inputs, the company has been appealing for a new round of price increases.
The new Kuomintang government has agreed to a 12.6 percent hike in electricity prices on July 1 and another 12.6 percent increase on October 1 to reflect the higher cost of raw materials and stem the state-run company's losses.
"The company is also working on ways to boost operational efficiency, with measures including cutting down the procurement price of fuels," Chen said.
Hoping that price adjustments would be made in a more timely fashion in the future, Chen warned that the company would not be able to construct new power-generating facilities should it continue to run a deficit in the coming years.
"The problem will also hurt the company's capital position," he told shareholders.
To make up for the NT$23.26 billion loss, Taipower said it has used the company's NT$1.99 billion legal surplus earned in previous years, as well as another NT$21.26 billion from the company's legal reserve.
Source: http://www.chinapost.com.tw/taiwan/%20business/2008/06/22/162096/Taipower-suffered.htm
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