BenQ ratings not immediately affected by Q4 loss - Taiwan Ratings |
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Wed, 21 Mar 2007 03:27
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TAIPEI (XFN-ASIA) - Taiwan Ratings Corp said the 'twBB+/Negative/twB' ratings it assigned to BenQ Corp (2352.TW) will not be immediately affected by the fourth-quarter net loss of 7.89 bln twd just reported by the company.BenQ reported yesterday that a big chunk of the total loss, or about 6.72 bln twd, came from its mobile unit's warranty and maintenance cost, which is expected to be a one-time expense.The cost is subsidized by German-based Siemens AG based on its contractual commitment to BenQ. BenQ took over the handset operations of Siemens in October 2005, but decided to back away from the investment barely one year later.Taiwan Ratings said BenQ's latest financial loss has no immediate impact on the company's credit quality.BenQ's cash flow and balance sheet in the fourth quarter of 2006 remain consistent with the current ratings, Taiwan Ratings said.BenQ's net debt was reduced slightly to 33.23 bln twd at the end of the fourth quarter 2006 from 35.18 bln at the end of the previous quarter.This was attributable mainly to proceeds from the disposal of long-term investments and fixed assets of 2 bln twd, the rating agency said.BenQ's liquidity is adequate, given that its cash balance of 9.4 bln twd was larger than that of long-term debt due within one year of 2 bln, it said.The company has arranged a syndicated loan of 7 bln twd in the first quarter of 2007, which provides additional financial flexibility, it said.Nevertheless, the performance of BenQ's mobile business continues to be weak, which drags down the company's overall profitability, Taiwan Ratings added.The unit's operating loss widened to 1 bln twd in the fourth quarter of 2006 from 80 mln in the previous quarter.Taiwan Ratings said its ratings on BenQ could be under pressure if it fails to improve its handset business unit over the short to medium term.As of 9.59 am, BenQ was down 0.60 twd at 13.05.(1 usd = 33.10 twd)philip.wang@afxasia.compw/net
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BenQ ratings not immediately affected by govt probe - Taiwan Ratings 