Mon, May 06, 2013 - Page 13 News List

Formosa Plastics posts rise in profit

HELPING HAND:Despite a period of low demand, the company received a boost as high global oil prices pushed up prices of oil-based products made by its subsidiary

By Camaron Kao  /  Staff reporter

Formosa Plastics (台塑), the nation’s largest maker of polyvinyl chloride, reported a 13.4 percent annual growth in its net profit for last quarter, after benefiting from a number of factors.

Net profit increased to NT$5.5 billion (US$186.4 million) last quarter, from NT$4.85 billion a year earlier and up 90 percent from NT$2.89 billion a quarter earlier, the company said in a filing to the Taiwan Stock Exchange on Friday.

The firm’s operating profit shrank 33 percent quarter-on-quarter, or 77 percent year-on-year to NT$539 million, the company’s filing showed.

FALLING DEMAND

Demand for the company’s products was lower than expected after the Lunar New Year holiday in February, dragging down its operating profit last quarter, a Formosa Plastics official said by telephone.

The official declined to be named.

“This quarter, decline in global oil prices has helped reduce raw material costs, which will help boost the company’s profit margin,” the official said.

Formosa Plastics booked NT$5.11 billion in non-operating profit, mostly from its oil refiner subsidiary, Formosa Petrochemical Corp (台塑石化), which reported a 123.45 percent annual growth in net profit for last quarter.

PROFIT SURGE

The refiner’s net profit surged to NT$9.59 billion from NT$4.29 billion a year ago, growing fourfold from NT$1.93 billion the previous quarter, a separate Formosa Petrochemical stock exchange filing showed.

Earlier this year, Formosa Petrochemical spokesman Lin Keh-yen (林克彥) said that high global oil prices in January and February helped push up prices of its oil-based products.

Furthermore, because many overseas operators carried out annual maintenance on their factories, the company benefited from the resulting low supply.

However, Lin said the company’s prospects for this quarter might not be as positive as for the previous one, because some its oil refineries are undergoing annual maintenance from March through next month.

In addition, the company may be adversely affected by global oil prices which have been declining since last month.

Separately, Formosa Plastics’ board of directors agreed on Friday to issue a stock dividend of NT$0.4 in addition to the cash dividend of NT$1.2 previously announced by the board.

DIVIDEND YIELD

That represented a cash dividend yield of 1.69 percent, compared with the company’s closing price of NT$70.8 on Friday in Taipei trading.

The dividend distribution is based on the company’s net profit of NT$4.66 billion, or NT$2.4 per share, last year, it said.

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