Taiwanese telcos looking at 10% drops in profit

30 Apr 2008

Taiwan’s dominant wireline and wireless operator, Chunghwa Telecom, says it expects to see a slight drop in revenues and an almost 10% fall in net profits in 2008 following an enforced cut to phone tariffs and unrealised losses from foreign derivative contracts. The telco is predicting net profits of TWD43.60 billion (USD1.43 billion) this year, down from TWD48.25 billion in 2007, Dow Jones reports. Revenues are expected to fall from TWD186.33 billion to TWD185 billion, while operating income could drop from TWD59.66 billion to TWD56.81 billion.

Separately, Chunghwa’s closest rival in Taiwan’s cellular market is forecasting its own net profits for the second quarter of this year to drop by around 10%. Taiwan Mobile is writing off assets worth around TWD396 million in the current financial quarter and this will cause net profit to fall to TWD3.76 billion, from TWD4.19 billion in the year-ago period, Dow Jones says. Taiwan Mobile reported net profits of TWD4.19 billion in the first three months of this year.