Formosa Petrochemical Corp (台塑石化), Taiwan’s only publicly traded oil refiner, returned to profit in the fourth quarter as the economic recovery boosted demand for its chemical products.
Net income was NT$10.2 billion (US$322 million) in the three months ending on Dec. 31, from a loss of NT$30.4 billion a year earlier. That was better than the NT$7.87 billion median estimate in a Bloomberg survey of eight analysts.
The number was derived by deducting the nine-month profit from full-year earnings, the Mailiao (麥寮), Yunlin County-based company announced yesterday.
The economic recovery is bolstering demand for cars, electronics and garments, in turn lifting consumption of chemicals. Taiwan’s GDP expanded 9.22 percent in the fourth quarter from a year earlier, ending five quarters of contraction, the state statistics bureau said on Feb. 22.
“It’s the consumption of end-products that helped, such as automobiles,” said Danny Ho (何耀仁), a Taipei-based analyst at Yuanta Securities Co (元大證券), who has a “buy” rating on the stock. “Demand for Formosa Petrochemical’s products was much better than expected.”
The number of new automobiles registered in Taiwan more than doubled in the fourth quarter, the statistics bureau said last month.
Formosa Petrochemical fell 0.7 percent to NT$84.60 on the Taiwan Stock Exchange before the earnings announcement. The stock has climbed 2.7 percent this year, compared with the 3.7 percent decline in the benchmark TAIEX index.
Fourth-quarter sales increased 43 percent from a year earlier to NT$178 billion, after declining 29 percent in the previous three months, monthly stock exchange filings showed.
Petrochemicals accounted for 32 percent of the company’s revenue between October and December, compared with diesel’s 22 percent and gasoline’s 17 percent. Other products include naphtha, jet fuel and fuel oil.
Full-year net income rose to NT$39.2 billion, or NT$4.11 per share, from NT$15.2 billion, or NT$1.59, in the previous year, Formosa Petrochemical said in a stock exchange filing yesterday.
The company plans to pay a cash dividend of NT$3.80 a share on last year’s earnings, the company said in a separate filing.
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