Thu, Aug 25, 2011 - Page 11 News List

Rising prices lift net profit at Formosa Petrochemical Corp

By Kevin Chen  /  Staff Reporter

Formosa Petrochemical Corp (台塑石化) said its net profit in the first six months of the year expanded 28.2 percent from a year ago on rising prices for oil products and petrochemical items like ethylene, according to a Taiwan Stock Exchange filing.

Formosa Petrochemcial said in the filing that it made a net profit of NT$27.19 billion (US$937 million), or NT$2.85 in earnings per share (EPS). It reported a net profit of NT$21.21 billion, or EPS of NT$2.23, a year earlier.

Despite a strong first-half performance, the company is expected to see reduced factory utilization in the second half following the recent partial shutdowns of its refining units in Mailiao (麥寮) in Yunlin County because of a number of fires over the past year.

In the second quarter, its net profit shrank by 48.3 percent to NT$9.33 billion, or EPS of NT$0.97, from the first quarter, with the No. 1 naphtha cracker already in suspension since May last year because of a fire.

Formosa Petrochemical runs three crude distillation units in Mailiao and the refinery revenue accounts for about nearly 70 percent of its total sales.

It operates three naphtha crackers there, accounting for about 25 percent of total sales.

Credit Suisse said on Aug. 2 that a one-month shutdown in refinery production as well as the suspension of the No. 1 and No. 3 naphtha crackers would lead to a 27 percent sales shortfall in the third quarter.

If the refinery production shutdown extends to two months, the impact would be larger at 50 percent, it said.

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