Formosa Chemicals & Fibre Corp (台灣化學纖維), which produces aromatics and styrenics, yesterday cut its revenue forecast for this quarter on the back of weaker-than-expected demand, but still predicted quarterly growth.
The firm lowered its forecast from the 8 percent sequential growth it predicted a month ago to growth of between 4 and 6 percent, amid anemic market sentiment, general manager Hong Fu-yuan (洪福源) said at a press conference yesterday.
Formosa Chemicals & Fibre attributed the expected revenue rise to its reinstituting two factories to the production line after completing annual maintenance on them last month. Last quarter, the company made NT$101.17 billion (US$3.33 billion) in revenue.
“Although our Chinese clients’ inventory levels are low, they did not increase their orders before China’s Golden Week holiday as they have in previous years. Even now, they are not moving,” Hong said.
According to Hong, clients have taken a wait-and-see stance as the prices of oil and naphtha, a raw material to make paraxylene, decline.
Citing energy and metals information provider Platts, Hong said prices for many of the firm’s products, such as paraxylene, oxylene and mixed xylene, are showing weakness, except for styrene monomer.
Hong said he expects Formosa Chemicals & Fibre’s revenue to remain flat this month from the NT$30.11 billion seen a month ago, though revenue will likely trend up in the fourth-quarter peak season.
He said profit might decline sequentially this quarter as the gross margins of the company’s products shrink, but this could be prevented if the board gives the firm a boost by approving the sale of some of its shares in Formosa Petrochemical Corp (台塑石化), the nation’s only listed oil refiner, Hong said.
Last quarter, Formosa Chemicals & Fibre’s net profit soared 114.4 percent to NT$7.44 billion, or NT$1.27 per share, from NT$3.47 billion, or NT$0.6 per share, a quarter earlier, due to non-operating gains, including NT$3.06 billion in cash dividends from its subsidiaries, a company filing with the Taiwan Stock Exchange showed. Last quarter’s figure was lower than the NT$9.44 billion, or NT$1.61 per share, seen in the same period the previous year, the filing said.
Meanwhile, Formosa Plastics Corp (台塑公司) posted NT$7.51 billion, or NT$1.18 per share, in profits last quarter, up 99.4 percent from NT$3.77 billion, or NT$0.59 per share, the previous quarter and up 15.9 percent annually from NT$6.48 billion, or NT$1.02 per share, a stock filing showed. Formosa Petrochemical posted profit of NT$6.81 billion, or NT$0.72 per share, last quarter, up 5.2 percent from NT$6.48 billion, or NT$0.68 per share, on a quarterly basis and down 31.56 percent annually from NT$9.95 billion, or NT$1.04 per share, a filing said.
Nan Ya Plastics Corp (南亞塑膠) saw profits of NT$9.34 billion, or NT$1.18 per share, last quarter, a 6.8 percent quarterly fall from NT$10.03 billion, or NT$1.26 per share.
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