Nan Ya profit rises on investments

Nan Ya Plastics Corp (南亞塑膠), the world's biggest processor of plastics for pipes and imitation leather, posted a profit gain for a fourth straight quarter on increased earnings from investments in energy and electronics businesses.

Net income surged 62 percent from a year earlier to NT$11.1 billion (US$333 million), or NT$1.46 per share, in the three months that ended March 31, from NT$6.85 billion, or NT$0.9, a statement the company filed with the Taiwan Stock Exchange said yesterday.

Nan Ya Plastics owns 44 percent of Nanya Technology Corp (南亞科技) and has a 24 percent stake in Formosa Petrochemical Corp (台塑石化). The plastics manufacturer has relied on investments in both companies for growth as competition from rivals including China Petroleum & Chemical Corp (中國石油化工), Asia's biggest oil refiner, has eroded earnings at its petrochemical unit.

"Nan Ya Plastics is making a fortune on its invested companies this year," Jason Lin, a Taipei-based analyst at SinoPac Securities Corp (永豐金證券) who has a "hold" recommendation on the stock, said before the earnings announcement.

Nanya Technology, Taiwan's second-biggest memory chipmaker, said on April 20 that first-quarter profit surged 59 percent from a year earlier.

Formosa Petrochemical, the nation's only publicly traded oil refiner, said on April 23 that net income had more than doubled.

First-quarter sales of Nan Ya Plastics climbed 10 percent to NT$45.5 billion, following a 13 percent gain in the previous three months, monthly filings to the stock exchange showed.

Non-operating income, including that from investment, soared 48 percent to NT$7.83 billion in the first quarter, from NT$5.3 billion a year earlier, the company said yesterday.

Shares of the company fell 1.6 percent to NT$60.8 by the Taiwan Stock Exchange's 1:30pm close before the earnings announcement. The stock has advanced 12 percent this year, compared with a 0.7 percent gain in the TAIEX index.

The company started as a plastic product maker and has expanded into manufacturing petrochemicals, polyester and electronics components such as optical disks and materials used to make printed circuit boards.

Sinopec, as Beijing-based China Petroleum is known, and BASF AG, the world's biggest chemical company, in June 2005 began jointly operating a US$2.9 billion chemical plant and processing units in Nanjing. Sales from the joint venture will compete with products from Nan Ya, which operates more than 30 plants in China.