Formosa Plastics Corp (台塑) and Formosa Chemicals & Fibre Corp (FCFC, 台灣化學纖維) yesterday downgraded their forecasts for revenues this quarter because of weaker-than-expected demand in China.
Formosa Chemical, which produces aromatics and styrenics, expects revenue this quarter to decline from NT$109.45 billion (US$3.61 billion) last quarter, contrary to its previous guidance that revenue this quarter would be flat from last quarter.
“Because of a tightened fund condition in China, downstream companies there did not replenish their inventories before the Lunar New Year holidays as much as before,” company general manager Hong Fu-yuan (洪福源) said.
The company reported revenue of NT$35.25 billion last month, down 6.8 percent from NT$37.81 a month earlier and 1.7 percent from NT$35.87 billion a year ago, according to a company filing to the Taiwan Stock Exchange.
Hong said revenue this quarter is likely to be lower than the previous year.
Formosa Plastics, the nation’s largest producer of polyvinyl chloride, expects its revenue this quarter to be flat at NT$55.95 billion from a quarter ago, which is lower than president Jason Lin’s (林健男) previous prediction that revenue would post sequential growth this quarter.
The company’s revenue for last month declined 9.6 percent month-on-month to NT$17.97 billion because Chinese downstream companies closed earlier ahead of the Lunar New Year holiday.
However, the company’s revenue for last month was higher than the NT$17.88 billion posted a year earlier.
Also affected by lower demand, Nan Ya Plastics Corp (南亞塑膠), the nation’s largest plastics maker, posted revenue of NT$26.92 billion last month, down 2.4 percent month-on-month and 3.5 percent year-on-year.
However, Formosa Petrochemical Corp (台塑石化), the nation’s only listed oil refiner, registered a 1.1 percent increase in monthly sales to NT$90.57 billion last month, benefiting from larger sales volume of oil and petrochemical products.
“Many petrochemical factories in Asia were shut down for maintenance,” president Tsao Mihn (曹明) said.
On an annual basis, revenue last month rose 2.5 percent due to higher prices and sales of petrochemical products, Tsao said.