Formosa Plastics Group (台塑集團), the nation’s largest industrial group, on Wednesday said the combined revenue generated from its four major units increased 3.95 percent month-on-month and 2.31 percent year-on-year to NT$158.36 billion (US$5.37 billion) last month.
Analysts said the revenue growth was largely due to higher sales after the completion of maintenance at its plants in September, while a relatively stable crude oil price last month also helped.
However, the figure of NT$158.36 billion remains lower than the NT$160 billion to NT$170 billion seen in July and August, which analysts attributed to maintenance at a Formosa Petrochemical Corp (台塑石化) olefins plant in Mailiao Township (麥寮), Yunlin County, in the past two months.
Formosa Petrochemical is the largest olefins producer in the nation and its products are mostly sold to companies within the group.
Overall, cumulative revenue of the group’s four units — which also include Formosa Plastics Corp (台塑), Nan Ya Plastics Corp (南亞塑膠) and Formosa Chemicals & Fibre Corp (台灣化學纖維) — totaled NT$1.56 trillion in the first 10 months of the year, up 5.9 percent from the same period the previous year, according to data compiled from the four companies’ stock exchange filings on Wednesday.
Among the four units, Formosa Plastics Corp, the group’s flagship company, reported the largest monthly increase in revenue of 7.22 percent last month to NT$17.56 billion. It was followed by Formosa Petrochemical’s 5.57 percent sales growth to NT$76.86 billion last month.
On an annual basis, Formosa Plastics Corp’s sales last month expanded 7.06 percent, but Formosa Petrochemical’s dropped 7.25 percent, their filings showed.
Jih Sun Securities Co (日盛證券) analyst Stephen Wan (萬力實) said yesterday in a client note that he expects Formosa Plastics Corp, the nation’s largest producer of polyvinyl chloride, to see revenue decline 4.51 percent to NT$50.75 billion this quarter from last quarter on seasonal factors, but that the firm’s quarterly figure would still rise 3.32 percent from the third quarter last year because of an increasing contribution from its US subsidiary, which uses cheap shale gas to make petrochemical products.
Nan Ya Plastics, meanwhile, reported a monthly revenue increase of 1.78 percent and a yearly increase of 7.35 percent to NT$26.53 billion last month, while Formosa Chemicals & Fibre, which produces aromatics and styrenics, posted a revenue increase of 0.84 percent to NT$21.64 billion from the previous month, an increase of 21.45 percent from last year.
The group may see limited upside for the four units’ combined sales this month, UBS Securities analyst John Chung (鍾朝安) said in a separate note yesterday.
Chung said that is because petrochemical prices were generally flattish last month from September and most petrochemical products, except olefins, are likely to see prices weaken during the slow fourth quarter.
“Both Nan Ya and Formosa Chemicals [& Fibre] should continue to see flattish monthly sales in November, while Formosa Petrochemical could see some improvement after Olefin No. 2 plant resumed operations in late October,” Chung said.