Shareholders of Formosa Plastics Corp (台塑企業), the nation’s largest producer of polyvinyl chloride, yesterday approved a plan to distribute 58.46 percent of its earnings per share (EPS) from last year and save the rest for capacity expansion needs.
The company is to pay a cash dividend of NT$1.9 to shareholders this year, based on last year’s EPS of NT$3.25, with the payout ratio to be the lowest in the company’s history.
“We apologize to our shareholders for distributing so little this year. It’s because we have many foreign investments to make,” company chairman Lee Chih-tsuen (李志村) said at this year’s annual general meeting.
“The interest rates overseas are high and it is difficult to obtain funds from foreign banks, making it more efficient for us to use our own money,” Lee said.
Normally, the company distributes most of its income generated the previous year to shareholders, a principle set by company founder Wang Yung-ching (王永慶), Lee said, adding that the company once paid 90 percent of its income to shareholders.
This year, the company has spent US$2 billion to increase the capacity of its US branch, Formosa Plastics Corp USA, which will allow the company to make an additional 1.2 million tonnes of ethylene, 600,000 more tonnes of propene and 400,000 more tonnes of high-density polyethylene each year, Lee said.
The company has also spent US$750 million to expand a factory in China’s Zhejiang Province to make an additional 160,000 to 200,000 tonnes of acrylate a year, 45,000 more tonnes of superabsorbent polymers and 75,000 more tonnes of ethylene-vinyl acetate, Lee added.
Even so, he said, the company’s operating profit in the first half of this year will be more than the NT$1.28 billion (US$42.6 million) of the previous year on the back of better global economic conditions.
However, Lee said it is not likely that Formosa Plastics Corp USA will report a higher profit this year than the US$1.33 billion it reported last year because of higher raw material costs. Formosa Plastics holds 22.59 percent of the US company’s shares.
Lee said the company is likely to post higher profit this year than NT$20.72 billion last year because it will book income of about NT$2.6 billion from sales of Formosa Petrochemical Corp (台塑石化) shares.
As for Formosa Plastics Group’s (台塑集團) construction of a new giant steel mill in Vietnam, Lee said the Vietnamese government has to guarantee the safety of Chinese workers for them to return to work.
About 3,000 Chinese workers were evacuated by Beijing during violence in Vietnam after China deployed an oil rig near the Vietnamese coast.
If these workers cannot resume work within two months, the mill’s first furnace might not be operational by the end of next year, the group said.
The group chose to build the mill in Vietnam because there are few factories in the country, so it does not need to worry about how much carbon dioxide it produces, Lee said.
Formosa Plastics shares rose 0.26 percent to NT$76.7 yesterday, outperforming the TAIEX, which was down 0.09 percent.
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS