Formosa Plastics Group (台塑集團), Taiwan’s largest industrial conglomerate, yesterday said that three major subsidiaries incurred losses last quarter while the fourth eked out a tiny profit, as soft market demand and price competition weighed on their earnings.
Nan Ya Plastics Corp (南亞塑膠), whose main business involves making processed plastic and chemical products, electronic materials and polyester fiber, recorded NT$60 million (US$1.86 million) of net profit during the July-to-September period, or earnings of NT$0.01 per share, the company said.
The lackluster results suggested a slowdown from three months earlier, while declining international oil prices weighed on plastic and chemical products.
Photo: Fang Pin-chao, Taipei Times
Their profit margin was also harmed by unfavorable currency exchange rates and the need to recognize losses in the affiliated Formosa Petrochemical Corp (台塑石化), it said.
However, selling prices picked up for materials used in polyester and printed circuit boards ahead of the high sales season for technology products, it added.
Formosa Petrochemical Corp (台塑石化), primarily engaged in the business of refining crude oil, selling refined petroleum products and producing and selling olefins from its naphtha cracking operations, booked losses of NT$3.08 billion, or NT$0.32 per share, worsening from three months earlier, it said.
The privately owned refinery attributed the poor showing to tepid demand and oil export nations’ announcement that they would cut output from December amid a supply glut.
The drop in oil prices grew more evident last quarter and deepened losses of inventory and purchased materials, the company said.
Inventory losses alone amounted to NT$2.42 billion, surging from NT$170 million in the April-to-June period, it said.
Formosa Plastics Corp (台灣塑膠), a vertically integrated supplier of plastic resins and petrochemicals, reported losses of NT$3 billion, or NT$0.49 per share, as it idled seven plants to conduct annual maintenance, up from four in the preceding quarter, the company said.
The bleak figures stemmed from unprofitable core businesses and unfavorable influences of Typhoon Gaemi in July that disrupted the operation of plants in Kaohsiung and weakened their output, it said.
At the same time, raw material prices remained high, putting pressure on the profit margin, it said.
The company also recognized losses from indirect investments in affiliated businesses in Taiwan and in the US.
Formosa Chemicals and Fibre Corp (台灣化學纖維), which produces and sells petrochemical products, nylon fibers and rayon staple fibers in Taiwan and internationally, posted losses of NT$1.93 billion, or NT$0.33 per share.
Listless market demand and selling prices were to blame, the company said, adding that it is reducing capacity to speed up inventory adjustments.
The company is closely monitoring China’s latest stimulus measures and would move to take advantage of any business opportunity, it said.
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of