Formosa Plastics Group (台塑集團), the nation’s largest industrial conglomerate, on Friday reported that combined sales at its four main units last month rose 26.9 percent compared with the previous year to NT$129.43 billion (US$4.17).
Among the four units, Formosa Petrochemical Corp (FPCC, 台塑石化), the nation’s only listed oil refiner, was the top performer last month, posting sales of NT$60.55 billion, up 44 percent annually and 7.4 percent monthly, company data showed.
At a news conference on Friday, FPCC president Tsao Minh (曹明) gave an upbeat outlook on global oil prices on the back of improving economic growth momentum and ongoing production cuts among oil suppliers.
Tsao said that crude prices are expected to rise to about US$55 per barrel this year, adding that rising prices have led to a US$3.2 per barrel increase in the average selling prices of the company’s oil products last month.
Formosa Chemicals & Fibre Corp (台灣化學纖維), which produces aromatics and styrenics, reported sales of NT$30.07 billion, gaining 22.1 percent yearly and 3.8 percent monthly.
The company is expecting sales this quarter to be higher than the previous quarter, driven by rising demand for home appliances and cars in China.
Nan Ya Plastics Corp (南亞塑膠), the nation’s largest plastics maker, posted sales of NT$23.998 billion last month, up 13.5 percent year-on-year, but down 6.1 percent month-on-month.
Nan Ya attributed the monthly decline to the lower number of working days due to the Lunar New Year holidays, which drove down demand from downstream manufacturers.
Formosa Plastics Corp’s (台塑) sales last month were NT$14.81 billion, 4.6 percent higher annually, but 17.2 percent lower monthly.
The company is expecting sales to pick up next month on the back of improving market prospects in India, where demonetization impacts are diminishing, as well as in the US, where demand is anticipated to rise as construction resumes following the end of extreme cold weather.
Meanwhile, analysts have said that FPCC’s earnings might have peaked last year and further growth could be limited.
Gains from rising crude oil prices, which had propelled the company’s earnings last year, are expected to be smaller this year, according to a HSBC Global Research report published last month.
The report said that corrections in the ethylene cycle and light olefin spreads this year as new capacities among suppliers emerge.
FPCC’s utilities business is also facing rising fuel costs amid a strong rebound in coal prices, the report said.
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