The four major units of Formosa Plastics Group (FPG, 台塑集團), the nation’s largest industrial conglomerate, yesterday said aggregate profits for the first half of the year increased, despite a decline in revenue.
The four — Formosa Plastics Corp (台灣塑膠), Formosa Petrochemical Corp (台塑石化), Nan Ya Plastics Corp (南亞塑膠) and Formosa Chemicals and Fibre Corp (台灣化學纖維) — reported a combined revenue of NT$643.79 billion (US$19.98 billion) in the first six months, down 16.5 percent annually, but pre-tax earnings rose to NT$104.01 billion, 14.8 percent higher than the same period last year, company data showed.
On a quarterly basis, the second quarter saw significantly improved profits compared with three months earlier. Revenue totaled NT$335.27 billion for last quarter, rising 8.7 percent from the first quarter, while pre-tax profit reached NT$69.39 billion, more than double the previous quarter’s level.
Formosa Petrochemical Corp attributed the profit growth mainly to improving demand.
Its pre-tax profit was NT$43.9 billion in the first half, increasing 44.8 percent year-on-year.
Despite fluctuations in oil prices, rising market demand for olefin products helped boost earnings, Formosa Petrochemical president Tsao Mihn (曹明) told a news conference yesterday.
However, the revenue and pre-tax profit of Nan Ya Plastics Corp remained a drag in the first half. Its revenue slid 17.2 percent year-on-year to NT$133.71 billion, while its profit fell 36.8 percent to NT$16.31 billion, company data showed.
Production maintenance and a sluggish regional economy contributed to the decline, Nan Ya Plastics chairman Wu Chia-chau (吳嘉昭) said.
First-half company reports also showed that Formosa Plastics posted NT$87.58 billion in revenue and NT$18.31 billion in pre-tax profit, while Formosa Chemicals recorded NT$157.07 billion in revenue and NT$25.5 billion in pre-tax profit.
However, prospects could soften in the second half of the year, the group said.
An upcoming annual maintenance and ethylene prices are seen as key factors that are expected to weigh on the group’s profit in the next three months, it said.
Eight factories of Formosa Plastics Corp are to go through maintenance next month and in September, bringing their output below second quarter’s levels, company chairman and president Jason Lin (林健男) said.
Raw material prices are also expected to affect future operations.
“If ethylene prices rise, we will have to adjust our capacity plans, and that could affect revenue in the third quarter,” Wu said.
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