Four major FPG firms report over 11% drop in profits for 2018

2019/01/09 18:11:07 fontsize-small fontsize-default fontsize-big
CNA file photo

CNA file photo

Taipei, Jan. 9 (CNA) Four major companies under the conglomerate Formosa Plastics Group (FPG) -- Formosa Plastics Corp., Nan Ya Plastics Corp., Formosa Chemicals & Fibre Corp. and Formosa Petrochemical Corp. -- reported Tuesday a more than 11 percent year-on-year decline in net profit for 2018, due to plunging international crude oil prices.

Data released by FPG that day showed the combined net profit of the four business entities totaled NT$210.94 billion (US$6.85 billion) in 2018, down 11.5 percent from a year earlier.

The companies noted that the global petrochemical industry had been booming until the fourth quarter of last year, when headwinds appeared amid volatility in the oil market.

The drop largely resulted from their deteriorating bottom lines in the fourth quarter, with international crude oil prices dropping to below US$50 per barrel at one point in the quarter, from a high of US$86 seen last year, according to analysts.

Nan Ya Plastics Vice Chairman Wu Chia-chao (吳嘉昭) told the press the weakness of the petrochemical market could continue into the first quarter of this year.

Formosa Plastics was the only one of the four to report a 0.2 percent year-on-year increase in net profit to NT$49.5 billion or NT$7.78 per share in 2018, after the company posted NT$2.28 billion in net profit or NT$0.36 per share, down 87.4 percent sequentially in the fourth quarter.

Net profit posted by Nan Ya Plastics for 2018 fell 3.3 percent from a year earlier to NT$52.74 billion or NT$6.65 per share after the company reported a 76.3 percent quarter-on-quarter fall in net profit totaling NT$4.33 billion or NT$0.55 per share in the fourth quarter.

Formosa Chemicals & Fibre also felt the pinch from the plunge in crude oil prices in the fourth quarter, when the company saw its net profit fall 91.7 percent from the previous quarter to NT$1.64 billion or NT$0.28 per share.

As a result, Formosa Chemicals & Fibre posted NT$48.64 billion in net profit or NT$8.34 per share, down 10.6 percent from a year earlier.

Formosa Petrochemical incurred a net loss of NT$4.18 billion or NT$0.44 per share in the fourth quarter, pushing down its net profit for 2018 by 25.1 percent from a year earlier to NT$60.06 billion or NT$6.3 per share.

Despite the fall in net profit for 2018, shares in the four companies moved higher on the local main board on Wednesday after a rally in U.S. markets overnight amid eased concerns over trade tensions between Washington and Beijing.

Formosa Plastics closed up 0.49 percent at NT$102.50, Nan Ya Plastics was up 0.40 percent at NT$74.50, Formosa Chemicals & Fibre up 1.40 percent at NT$108.50, and Formosa Petrochemical rose 6.05 percent at NT$114.00.

(By Wei Shu and Frances Huang)

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