Mon, Apr 15, 2019 - Page 15 News List

FPG units upbeat about second quarter, except for Formosa Chemicals & Fibre

By Chen Cheng-hui  /  Staff reporter

Smoke rises from Formosa Chemicals & Fibre Corp’s No. 3 aromatics plant in Yunlin County’s Mailiao Township on April 7.

Photo: CNA

Three major units of Formosa Plastics Group (FPG, 台塑集團), the nation’s largest industrial conglomerate, have given positive business outlooks for this quarter, with only Formosa Chemicals & Fibre Corp (FCFC, 台灣化纖) predicting potential downside risks due to the closure of its No. 3 aromatics plant in Yunlin County’s Mailiao Township (麥寮) after a gas blast and fire.

Overall, the four units reported that their aggregate net profit for last quarter surged by 622 percent quarterly to NT$30.94 billion (US$1 billion), but dropped 45.4 percent from a year earlier, with combined revenue decreasing 7.9 percent annually to NT$384.48 billion, according to their latest financial results, which were released on Wednesday.

The April 7 explosion at FCFC’s No. 3 aromatics plant could result in an estimated loss of NT$1 billion per month, the company said on Monday.

The blast could drag revenue for this quarter below last quarter’s NT$91.43 billion, FCFC vice chairman Hong Fu-yuan (洪福源) told a news conference, the Liberty Times (the Taipei Times’ sister newspaper) reported on Thursday.

Hong said that uncertainties regarding the supply of benzene and styrene monomer feedstocks after the plant’s suspension in the wake of the fire could affect shipments of FCFC’s four major products: acrylonitrile butadiene styrene, polystyrene, polypropylene and polycarbonate, the Liberty Times reported.

The company’s net profit for the first quarter climbed 382 percent quarterly, but fell 34.33 percent annually to NT$8.52 billion.

However, operating profit was better than expected at NT$8.56 billion, thanks to a quarterly recovery in the spread of aromatics products and better demand for downstream plastics, the firm said.

FCFC’ earnings per share (EPS) reached NT$1.46, which was the highest among the four units in the first quarter.

Formosa Plastics Corp (FPC, 台塑), the group’s flagship firm, reported the second-highest EPS of the four at NT$1.28, as net profit increased 249.1 percent quarterly to NT$8.14 billion in the first quarter. On a yearly basis, net profit dropped 31.5 percent.

FPC chairman Jason Lin (林健男) said that the company expects this quarter’s sales to be higher than last quarter’s NT$53.01 billion, owing to high-season demand for its products used in the electronic, automobile and footwear industries, the Liberty Times reported.

FPC’s factory utilization ratio would increase to 95 percent this quarter, compared with 90 percent for last quarter, he said.

Nan Ya Plastics Corp (南亞塑膠) chairman Wu Chia-chau (吳嘉昭) said that Chinese polyester makers are expected to achieve higher factory utilization this quarter, which would benefit demand for the company’s ethylene glycol shipments this quarter.

Nan Ya reported EPS of NT$0.64 for the first quarter, as net profit increased 16.68 percent quarterly, but declined 62.48 percent annually to NT$5.05 billion.

Revenue was NT$70.92 billion, the lowest in the past 10 quarters, company data showed.

Formosa Petrochemical Corp (FPCC, 台塑石化), the oil refining subsidiary, expects a factory utilization rate of 90 percent this quarter as more factories complete their annual maintenance, compared with 88 percent in the first quarter, while crude oil prices are on track for a gradual recovery, president Tsao Minh (曹明) said.

Brent crude oil prices are likely to stay between US$67 and US$68 per barrel this quarter, which would bode well for the company’s inventory value, he said.

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