Thu, Jun 07, 2018 - Page 12 News List

Varied Q3 forecasts for FPG units

UNCERTAINTY:Formosa Chemicals and Nan Ya Plastics were upbeat on revenue, while the petrochemical and plastics arms voiced caution over oil and protectionism

By Kuo Chia-erh  /  Staff reporter

The four major units of Formosa Plastics Group (FPG, 台塑集團) yesterday provided mixed outlooks for next quarter, as global oil prices remain uncertain due to growing political risk.

“Worries over supply disruptions from Venezuela and Iran have driven up oil prices,” Formosa Petrochemical Corp (台塑石化) president Tsao Minh (曹明) said.

Tsao did not give a detailed forecast for global crude oil prices or the company’s product prices, but said that the US’ assurance of a stable oil supply should offset the effects of declining oil exports from Venezuela and Iran.

Washington has reportedly asked Saudi Arabia and other OPEC members to increase oil production by about 1 million barrels a day, Bloomberg News said on Tuesday.

“The US’ protectionist trade policies should be closely watched, as some of our customers seemed hesitant to place orders,” Formosa Plastics Corp (台塑) chairman Jason Lin (林健男) told reporters.

In addition, Formosa Plastics’ utilization rate is expected to be about 89 percent next quarter, compared with this quarter’s 92 percent, as five factories are scheduled to undergo regular maintenance, he said.

Meanwhile, Formosa Chemicals & Fibre Corp (台灣化學纖維) and Nan Ya Plastics Corp (南亞塑膠) were relatively upbeat about their revenue growth, thanks to robust demand for their benchmark products.

“Next quarter’s revenue is expected to surpass this quarter, as global demand for electric material should grow further in the industry’s peak season,” Nan Ya chairman Wu Chia-chau (吳嘉昭) said.

Formosa Chemicals president Hong Fu-yuan (洪福源) also said that he expects revenue in the third quarter to grow from this quarter on the back of strong customer demand.

The four companies all reported revenue increases last month, supported by an uptrend in global crude oil prices that continued to boost prices of petrochemical products.

Formosa Petrochemical, the nation’s only listed oil refiner, enjoyed the largest annual growth in monthly revenue among the group, with sales increasing 31.5 percent year-on-year to NT$66.26 billion from NT$50.39 billion (US$2.23 billion from US$1.69 billion).

Sales of Formosa Plastics, Taiwan’s largest producer of polyvinyl chloride, rose 25.1 percent year-on-year to NT$22.36 billion from NT$17.87 billion, while Nan Ya, the nation’s largest plastics maker, saw its revenue increase 22.1 percent annually to NT$ 30.05 billion from NT$24.61 billion.

Formosa Chemicals, which produces aromatics and styrenics, reported a revenue of NT$32.64 billion last month, a 22.5 percent increase from NT$26.66 billion in the period last year, company filings showed.

The four units combined recorded NT$151.31 billion in sales last month, up 26.6 percent year-on-year, with their cumulative sales in the first five months totaling NT$708.49 billion, up 17.2 percent from a year earlier.

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