NT$4 billion in losses for CHT due to poorly timed contract

Chunghwa Telecom (CHT) have reported in a press release that the company has lost a total of NT$4.0 billion (US$129 million) because of a 10 year foreign exchange derivative contract that was signed with international investment bank Goldman Sachs last year.

Foreign exchange derivative contracts are designed to protect against exchange rate fluctuations. The contract was signed because CHT had to buy US dollars for the company’s international call settlement and capital expenditure fees.

Between September and December 2007 CHT suffered a total mark-to-market unrealised valuation loss of NT$500 million. This figure had risen to NT$4 billion by 29th February. The loss is due to the continued appreciation of the NT dollar against the US dollar.

Story link: NT$4 billion in losses for CHT due to poorly timed contract