Formosa Plastics Corp (台塑), the nation’s largest maker of polyvinyl chloride (PVC), returned to a profit as the economic recovery increased demand and product prices.
Net income was NT$7.71 billion (US$243 million) for the three months ended Dec. 31, compared with a loss of NT$14.6 billion a year earlier, according to figures derived from full-year earnings released by the company yesterday. That was higher than the median estimate of NT$7.4 billion profit in a Bloomberg News survey.
The recovery in the global economy bolstered demand for petrochemicals including PVC, used in construction and consumer goods such as handbags.
PHOTO: BLOOMBERG
“Petrochemical makers were all making money last year,” said Max Chan, an analyst at Capital Securities Corp (群益證券), who has a “neutral” rating on the stock. “Demand for petrochemicals is moving in tandem with the general economy.”
Sales in the fourth quarter last year soared 54 percent from a year earlier to NT$44.2 billion, compared with a 14 percent decline in the third quarter, according to monthly stock exchange filings.
PVC prices climbed 8 percent in East Asia during the fourth quarter, said Polymerupdate.Com., a provider of plastics and petrochemical information.
Formosa Plastics fell 0.4 percent to NT$70.50 in Taipei trading yesterday, before the earnings announcement. The stock has climbed 4.8 percent this year, compared with the TAIEX’s 2.9 percent decline.
Full-year net income rose to NT$27.5 billion, or NT$4.50 per share, from NT$19.7 billion, or NT$3.45, in the previous year, the company said.
Formosa Plastics plans to pay a cash dividend of NT$4 a share on last year’s earnings.
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