Oil refiner Formosa Petrochemical Corp (FPCC, 台塑石化) yesterday gave a gloomy business outlook for this year, citing the COVID-19 pandemic and tumbling crude oil prices.
“We have suffered immensely since the US-China trade conflict last year ... [and we are facing more] challenges with the ongoing pandemic and drops in oil prices,” Formosa Petrochemical chairman Chen Bao-lang (陳寶郎) told shareholders at the annual general meeting in Taipei.
After posting a 38.7 percent year-on-year decline in net profit to a five-year low of NT$36.8 billion (US$1.23 billion) last year, Formosa Petrochemical reported a loss of NT$9.99 billion for last quarter due to plummeting crude oil prices and weakening demand amid the pandemic.
“It [COVID-19] has dealt a heavy blow to market demand for crude oil, as people have avoided going shopping and flights have been canceled,” Chen said.
Demand shrank further as the oil price dispute that broke out between Russia and Saudi Arabia late last quarter led the oil market to the brink of collapse, Chen added.
In the first four months of this year, the company posted a 27.96 percent annual decline in revenue to NT$159.68 billion.
“Russia and OPEC reached an agreement to cut production from the start of this month, which should help prop up oil prices,” Chen said.
However, a complete recovery in prices appears improbable in the short term, as the US and China continue to expand their petrochemical production, Chen said.
He forecast crude prices of about US$40 per barrel for benchmark Dubai crude by the end of the year, a sizable gap compared with January prices of nearly US$70 per barrel.
“Ultimately it [oil price] would depend on the global economy, which in turn is dependent on the outcome of the current pandemic,” Chen said, adding that the development of a vaccine remains crucial.
Chen expressed the hope that market demand might see a revival in the second half of this year as COVID-19 transmissions slow.
“With Europe and the US reopening their borders, we might see a pickup in economic activity, which would drive demand for oil,” Chen said.
Seeking to drive business growth despite the current gloom, FPCC expanded its domestic presence last month with the addition of 81 gas stations.
With a total of 600 gas stations, Formosa Petrochemical commands about 25 percent of the market.
Meanwhile, construction of the company’s US$9.4 billion ethane cracking and petrochemical complex in the US state of Louisiana is under way.
FPCC’s shareholders yesterday approved a cash dividend of NT$2.9 per share, implying a dividend yield of 3.31 percent based on its closing price of NT$294 in Taipei trading yesterday.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the