Formosa Petrochemical Corp (台塑石化), the nation’s second-biggest oil refiner, reported an after-tax net profit of NT15.56 billion (US$473 million), or NT$1.63 in earnings per share, for the first half of the year, the company’s stock exchange filing showed on Friday.
The results were 47.4 percent lower than the same period last year, when the Mailiao (麥寮), Yunlin County-based company posted an after-tax net profit of NT$29.56 billion, or NT$3.2 per share.
Pre-tax profit was NT$23.84 billion in the first half, the company said in the filing. Revenue in the first six months plunged 44.4 percent year-on-year to NT$275.57 billion, it said.
Formosa Petrochemical is a member of the Formosa Plastics Group (台塑集團), the nation’s biggest petrochemical conglomerate. The refining unit’s first-half profit was lower than that of its local rival CPC Corp, Taiwan (CPC, 台灣中油), which reported an after-tax net profit of NT$17.76 billion over the same period, the state-run CPC said in a statement on Friday.
But Formosa Petrochemical’s first-half results were in line with Citigroup’s forecast, which predicted the company would post a pre-tax profit of NT$23.3 billion and revenue of NT$275.6 billion during the January-June period.
While stable oil prices are likely to help improve the company’s refining margins in the second half and management at Formosa Petrochemical also expects the margin to improve slightly in the fourth quarter from US$3 a barrel in the June-July period, the company’s “top priority is to gain back domestic market share,” Citigroup analyst Oscar Yee (余浩銘) said in a client note.
Formosa Petrochemical has a 22-percent share in the domestic market, trailing the unlisted CPC, which controls the remaining share.
Formosa Petrochemical did not provide financial data for the second quarter. By subtracting the first-quarter results from the first-half figures, the company’s second-quarter net profit was NT$12.90 billion, down 35 percent from a year earlier, but up 385 percent from the previous quarter.
Second-quarter revenue was NT$156.99 billion, down 40.8 percent from a year ago, but up 32.4 percent from the first quarter.
The second-quarter performance confirmed a market consensus that the refiner’s business was steadily recovering from the January-March period, when its profit plunged 73 percent and revenue declined 49 percent year-on-year amid the global economic slowdown.
Yuanta Securities Corp (元大證券) last week offered a target price of NT$92 for Formosa Petrochemical, which closed at NT$77.7 on Friday, citing rising shipments of oil/petrochemical products across the Taiwan Strait once the two sides sign an economic cooperation framework agreement.