Falling crude oil prices continued to weigh on Formosa Plastics Group (台塑集團), the nation’s largest industrial conglomerate, as its four main companies reported sharp annual declines in revenue last month, separate stock filings showed yesterday.
Among the four major units, only the plastic manufacturing arm, Nan Ya Plastic Corp (南亞塑膠), posted a 1.6 percent increase in sales to NT$27.34 billion (US$868.18 million) last month due to better demand for electronics materials, the company said in a filing.
However, compared with December, Nan Ya’s sales were down 1.6 percent, as the company passed on cost savings from falling crude prices to clients, it said.
Formosa Petrochemical Corp (台塑石化), the nation’s only private oil refiner, bore the brunt of cheaper crude prices, with revenues plunging 45.3 percent to NT$49.56 billion last month, the company’s filing said.
Shipments of refined products totaled 15.73 million barrels last month, down 1.5 million barrels from January last year, the filing said, as customers stayed on the sidelines on expectations of further price corrections.
Dubai crude oil averaged US$45.6 a barrel last month, contracting 56 percent from US$104 a barrel a year earlier, Formosa Petrochemical said.
Formosa Chemicals & Fibre Corp (台灣化學纖維), which produces aromatics and styrenics, fared as poorly, with revenues dropping 23.3 percent to NT$26.95 billion last month, according to its stock filing.
“The drastic declines in crude and raw material prices made customers cautious and affected demand,” the filing said.
Formosa Plastics Corp (台塑), the nation’s largest producer of polyvinyl chloride, saw a milder 5.5 percent annual decline to NT$16.98 billion last month, as the company slashed product prices to reflect cost savings, the filing said.
Polyvinyl chloride prices slumped 40 percent last month from a year ago, while polypropylene dropped 46.8 percent.
Compared with one month earlier, Formosa Plastics saw a 2.3 percent increase in sales, as some downstream firms in China and India started to rebuild inventory, encouraged by widening margins.
Formosa Plastics Group executives said they expect revenues to weaken further from last quarter, when the group posted its worst-ever results since the fourth quarter of 2008, led by poor refining operations at Formosa Petrochemical, local media reports said.
Altogether, the four units posted a combined revenue of NT$120.83 billion last month, down 5.7 percent from December.
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