Formosa Plastics Corp (台塑) yesterday reported the highest earnings per share among Formosa Plastics Group’s (FPG, 台塑集團) four core firms in the first nine months of the year.
Formosa Plastics — the group’s flagship company — topped the four core companies by posting NT$13.42 billion (US$456.65 million), or NT$2.19 per share, in pretax profit in the first nine months, although the figure was still down 66 percent from a year ago, the company said in a statement.
In the third quarter, the company’s pretax profit reached NT$7.72 billion, or NT$1.26 per share, up from the NT$272.54 million, or NT$0.04 per share, in the second quarter, the statement said.
“Strong income from investments and cash dividends was the major factor boosting the company’s profitability in the third quarter,” Formosa Plastics president Jason Lin (林健男) told a press conference in Taipei.
Lin said he expects the company’s revenue in the fourth quarter to be higher than the NT$42.22 billion posted in the third quarter, on the back of improving global economic sentiment driven by quantitative easing measures in the US and Europe, as well as expansionary fiscal policy in China.
He also said the abundant supply of materials might lift the firm’s utilization rate to more than 90 percent in the October-to-December period to further boost revenue in the quarter.
The other three core units — Nan Ya Plastics Corp (南亞塑膠), Formosa Chemicals & Fibre Corp (台灣化學纖維) and Formosa Petrochemical Corp (台塑石化) — also said their pretax figures turned back into the black in the July-to-September period, from the loss-making second quarter.
Formosa Chemicals reported a pretax profit of NT$6.17 billion, or NT$1.09 per share, in the third quarter.
However, in the first nine months, the firm posted NT$3.7 billion in pretax profit, or NT$0.65 per share, which represented a decline of 90.4 percent from a year ago, as sluggish demand from China dragged down prices and further impacted sales.
Looking ahead, Formosa Chemicals president Hong Fu-yuan (洪福源) said sales in the fourth quarter would likely grow from NT$62.45 billion in the third quarter on the back of possible inventory refurbishment by clients in China after the country’s week-long national holiday.
The better sales prospects in the fourth quarter is expected to boost the company’s full-year revenue to top its historical high of NT$283.1 billion recorded in 2010, Hong added.
Nan Ya Plastics Corp (南亞塑膠) reported NT$5.39 billion in pretax profit, or NT$0.69 per share, in the third quarter, compared with a pretax loss of NT$2.63 billion, or a NT$0.34 loss per share, in the second quarter, a company statement said.
However, the company’s pretax profit in the first nine months fell 84.8 percent from the previous year to NT$4.49 billion, or NT$0.57 per share, which Nan Ya chairman Wu Chia-chau (吳嘉昭) attributed to slowing market demand amid a global economic slowdown and a NT$4 billion loss the company booked in the third quarter from its reinvestment in loss-making DRAM chipmaker Nanya Technology Co (南亞科技).
Wu said Nan Ya’s performance in the fourth quarter would depend on the schedule to relaunch its fourth monoethylene glycol unit, which was shut down after a fire on Sept. 26, as the product has been the major source of the company’s profitability.
As for Formosa Petrochemical, the refiner made a pretax profit of NT$11.18 billion in the third quarter, or NT$1.17 per share, rebounding from NT$15.57 billion, or NT$1.63 per share, in pretax losses in the second quarter. That allowed the company to post NT$479.71 million, or NT$0.05 per share, in pretax profit in the first nine months, down 98.4 percent year-on-year.
Formosa Petrochemical president Tsao Mihn (曹明) said he expects that Brent crude oil prices may remain between US$110 and US$115 per barrel for the rest of the year, with the demand side leading the company’s profitability in the fourth quarter.