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CHC reports 2014 consolidated revenue of NT$21.2274 billion

Continental Holdings Corp. (CHC, TWSE stock symbol 3703) today reported its 2014 financial results and 2015 business plans. In 2014, CHC and its subsidiaries had consolidated revenue of NT$21.227 billion and net loss of NT$980 million, translating into loss per share of NT$1.11. The company will not distribute cash/stock dividends this year.

Ken Hung, CEO of CHC said: “CHC’s 2014 consolidated revenue and sales posted by its two subsidiaries were in line with expectations, with earnings for our core business reaching NT$1.279 billion. BUT, due to losses incurred from our holdings of THSRC shares, we’ve recognized a loss of NT$2.259 billion based on IFRS rules, resulting in a net loss of NT$980 million.”

Mr. Hung continued: “Besides civil engineering construction, real estate development, and environmental project development that form our core business, CHC is also considering developing senior housing projects in the face of an ageing society both in Taiwan and abroad. Hence, while CHC still holds unappropriated retained earnings at this stage, it will not distribute dividends this year in the hope of keeping company funds sufficient.

Looking at the breakdown of CHC’s 2014 consolidated revenue, construction business continued to be the main source of income, accounting for 75.39% of the total; real estate development and others, meanwhile, accounted for 23.57%. Real estate development income mostly came from CDC, which had total revenue of NT$5.003 billion. For 2015, the government’s effort to tame housing prices is likely to keep Taiwan’s real estate market sluggish. Despite that, CDC will continue to upkeep its brand image, engage in new development projects in Taipei, New Taipei, and Taichung Cities, roll out high-quality products at good locations, and fulfill the needs of target customers.

Civil/building Construction revenue mostly came from CEC and its subsidiaries, totaling approximately NT$16.003 billion; it came mainly from two sources — MRT projects and building construction projects, accounting for 47.93% and 36.1% of the total, respectively. The overall bearishness in the construction industry is expected to continue in 2015; aside from the Green Line of the Taoyuan MRT, no major projects are expected to launch. Uncertain factors such as tightened housing loans, crackdown on property speculation, and increased interest rates have made it more difficult to get new projects. In the face of more intense competition in both domestic and overseas markets, CEC has set the following goals for Taiwan: to keep enhancing profitability, vertically integrating civil engineering, construction, and electric/electronic operations, and providing training for project management. As for overseas operations, CEC will maintain and deepen its presence in existing markets, establish appropriate management systems, and strengthen OHS (occupational health and safety) related systems and training.

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