Formosa Plastics Corp (台塑) increased its second-quarter profit by 53 percent as regional demand for its chemical products rose.
Net income for Taiwan’s largest maker of polyvinyl chloride (PVC) climbed to NT$11.8 billion (US$369 million) from NT$7.72 billion a year earlier, calculations made by Bloomberg News — by subtracting first-quarter profit from six-month earnings announced by the company yesterday — showed. The figure beat the NT$9.57 billion average of six analysts’ estimates.
Formosa Plastics is expanding production capacity in China to tap rising demand for chemicals used to make consumer products, including textiles.
“Some of Formosa Plastics’ products are going very well,” said Danny Ho, a Taipei-based analyst at Yuanta Securities Co (元大證券), which has a “buy” rating on the stock. “Inventories are low, and demand in China, Asia and emerging markets is rising.”
Sales in the second quarter rose 27 percent from a year earlier to NT$50.4 billion after increasing 47 percent in the first quarter, monthly stock exchange filings showed.
Formosa Plastics climbed 1.9 percent to close at NT$71 in Taipei trading, before the earnings announcement. The stock has risen 5.5 percent this year, compared with the 5.5 percent drop in the TAIEX.
First-half net income rose to NT$20 billion, or NT$3.27 a share, from NT$10.6 billion, or NT$1.74 a share, a year earlier, Formosa Plastics said in an e-mailed statement yesterday.
Profit in the first half had exceeded expectations after delays in the startup of chemical plants in the Middle East, chairman Lee Chih-tsuen (李志村) said at the company’s annual shareholders’ meeting in Taipei on June 25, without giving net income figures or estimates.
Formosa Plastics plans to increase investment in Ningbo, China, by more than US$600 million, he told reporters after the meeting.
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