Chartered slashes Q4
expectations
With weaker market conditions,
foundry now expects net loss of US$76m to
US$84m
The company will be releasing its
fourth-quarter results on Jan 30 next year. Its shares closed half
a cent lower at 18.5 Singapore cents yesterday.
For its last quarter, Chartered
posted a net loss of US$24.4 million and revenue of US$463.7
million. Taking into account SMP's contribution, Q3 revenue was
US$487.2 million.
CEO Chia Song Hwee said then that
this salary-trimming exercise, together with other expected payroll
reductions, would help Chartered save between US$25 million and
US$30 million on an annual basis.
Chartered said in October,
following its third-quarter earnings results announcement, that it
would undertake a 5-20 per cent temporary
salary reduction for its employees - a company-wide exercise that
would include senior management.
By ONG BOON
KIAT
CHARTERED Semiconductor
Manufacturing's fourth quarter is shaping up to be worse than it
earlier anticipated.
The Singapore foundry released its
customary mid-quarter update yesterday, announcing that it expects
to suffer a net loss of between US$76 million and US$84 million for
Q4.
In its initial Q4 guidance at the
end of October, it estimated a net loss of between US$52 million
and US$62 million.
Chartered's fourth quarter will
end on Dec 31.
Also expected to further plummet
is revenue. The company now expects revenue of between US$343
million and US$353 million for Q4, compared with the earlier
estimate of between US$362 million and US$374 million.
Including its share of the
minority-owned joint-venture fab SMP, the revised Q4 revenue
estimate is between US$350 million and US$360 million.
The earlier estimate was between
US$372 million and US$386 million.
'As the quarter is progressing, we
are seeing some of our customers postponing their deliveries due to
what we believe are weaker market conditions and their intent to
keep inventories low,' George Thomas, senior vice-president and CFO
of Chartered, said in a statement.
'We are therefore revising our
outlook for the fourth quarter. Due to the uncertain business
environment that continues to cloud our business visibility, we are
aggressively identifying additional areas for cost reduction in
addition to those that are being implemented currently.'
Chartered should be applauded for making efforts to retain its
employees and get all to reduce their salaries.
Some colleagues and ex-colleagues of mine have been retrenched
in recent months in the financial services sector. These companies
prefers to sacrifice a few lambs to save the rest. They would
target the older workers whose salaries are high and their job
functions can performed by younger colleagues whose salaries are
much lower.
These older workers can be hard-working and efficient task
oriented managers. Their high salaries make them ideal targets for
retrenchment unless their skill sets are not easily replaceable. If
we lay-off a manager who earns $15K a month, many junior colleagues
need not suffer any pay-cuts especially when their salaries are not
that high.
I know some older managers who make themselves indispensable and
refused to teach his younger colleagues to ensure his survival. For
some, the strategy works until the management decides to promote
him and transfer him another department for the slaughter.
In the new department, he finds difficulties acquiring new
skills and unable to adapt fast enough. Bosses decide to fail his
appraisals and offers him a retrenchment package unless he can find
other departments to accept his high salary costs.