Three major units of Formosa Plastics Group (FPG, 台塑集團), the nation’s largest industrial conglomerate, yesterday released positive business outlooks for this quarter, despite an escalating trade war between the US and China.
The company’s revenue performance this quarter is expected to outpace last quarter, thanks to recovering demand and higher utilization rates, Formosa Plastics Corp (台塑) chairman Jason Lin (林健男) told an earnings conference in Taipei yesterday.
A 25 percent tariff announced by China on US-made chemicals would not affect the operations of Formosa Plastics’ US subsidiary in the short term, as polyethylene products made by the US unit are sold mainly to Latin America, Europe and Africa, Lin said.
The company would expand sales channels in overseas markets apart from China, such as Europe and Southeast Asia, after capacity expansion at its US plant is completed in the fourth quarter of this year, Lin added.
Echoing Lin’s remarks, Formosa Petrochemical president Tsao Minh (曹明) gave an optimistic near-term guidance on the group’s oil refining subsidiary, saying oil prices would not fluctuate dramatically.
“It is less likely that crude oil prices will fall below US$60 per barrel [because of recent trade disputes], as Saudi Arabia continues to cut production to bolster prices,” Tsao told reporters.
Nan Ya Plastics chairman Wu Chia-chau (吳嘉昭) told the news conference that he also expects sales to advance this quarter, given robust customer demand for its electric materials and plasticizers.
The group last quarter saw its aggregate net income rise 2.8 percent annually to NT$56.62 billion (US$1.94 billion), up from NT$55.08 billion in the same period last year, with cumulative revenue increasing 11.5 percent to NT$417.42 billion from NT$374.22 billion.
Formosa Plastics said net profit last quarter rose 20.2 percent to NT$11.88 billion from NT$9.89 billion, and sales rose 13.3 percent to NT$54.17 billion from NT$47.8 billion.
Nan Ya posted a net profit of NT$13.47 billion for last quarter, up 23.9 percent annually from NT$10.87 billion, while sales increasing 13.1 percent to NT$82.22 billion from NT$72.68 billion.
Formosa Chemicals & Fibre Corp (台化), an aromatics manufacturing arm, reported that net profit last quarter climbed 10.8 percent annually to NT$12.98 billion from NT$11.71 billion, with sales rising 10.9 percent to NT$98.96 billion from NT$89.26 billion.
Formosa Petrochemical said net profit last quarter fell 19.1 percent to NT$18.3 billion from NT$22.62 billion a year earlier, despite sales rising 10.7 percent annually to NT$182.08 billion.
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