The four major units of Formosa Plastics Group (FPG, 台塑集團), the nation’s largest industrial conglomerate, yesterday posted a 39.8 percent year-on-year decline in combined profit for last year, due to weak demand and lower product prices, as well as narrower spreads between revenues and material costs.
The group’s four listed companies — Formosa Plastics Corp (台灣塑膠), Formosa Chemicals and Fibre Corp (台灣化學纖維), Nan Ya Plastics Corp (南亞塑膠) and Formosa Petrochemical Corp (台塑石化) — posted combined net income of NT$127.16 billion (US$4.24 billion) last year, the lowest since 2015.
Based on their regulatory filings issued yesterday, Formosa Plastics, the group’s flagship company, reported a 24.7 percent year-on-year decrease in net income to NT$37.2 billion, or earnings per share of NT$5.86, the highest among the four units, while revenue fell 9.78 percent to NT$207.85 billion.
Formosa Chemicals and Fibre, which manufactures aromatics and styrenics, posted the group’s second-highest profit, reporting that net income dropped 38.5 percent year-on-year to NT$29.99 billion, or earnings per share of NT$5.14, while revenue decreased 20.47 percent to NT$324.37 billion.
Nan Ya Plastics, the nation’s largest plastics maker, posted net income of NT$23.07 billion, or earnings per share of NT$2.91, down 56.3 percent year-on-year, while revenue dropped 14.03 percent to NT$286.34 billion.
Formosa Petrochemical, the nation’s only listed oil refiner, posted the lowest earnings per share of NT$3.86 as its net income fell 38.7 percent to NT$36.81 billion, while revenue decreased 15.84 percent to NT$646.01 billion.
Despite the lackluster earnings performance, FPG announced that it would give each of its about 40,000 employees NT$20,000 in cash gifts in a bid to boost its year-end bonus payouts, compared with NT$15,000 in cash gifts the previous year.
The extra cash perk was agreed after FPG chairman William Wong (王文淵) met with representatives of the workers’ unions of the group’s major subsidiaries yesterday.
The cash gifts announcement came after FPG earlier this week said that it would issue year-end bonuses equivalent to 4.94 months of salary ahead of the Lunar New Year holiday that starts on Jan. 24.
By including the cash gifts, employees’ year-end bonuses are expected to breach five months of salary, compared with the 5.83 months of salary the group paid last year.
The unions said the lower year-end bonuses were acceptable given the deteriorating bottom lines of the four units because of the global trade disputes, adding that Wong’s award of the cash gifts was to express his gratitude to all the group’s employees.
Wong on Thursday said that he remains cautious about the global petrochemical industry this year amid continued concerns over global trade disputes and political tensions in the Middle East.
Additional reporting by CNA
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