Bloomberg News

Formosa Plastics Posts Higher Profit as Chemical Demand Climbs

January 03, 2013

Formosa Plastics Group’s biggest units reported improved quarterly earnings as demand for petrochemicals increased.

Formosa Plastics Corp. (1301), a polyvinyl chloride maker, posted a pretax profit of NT$2.85 billion ($98 million) in the three months ended Dec. 31, the parent company said in a statement today. That compared with NT$942 million a year earlier and the NT$5.52 billion average of six analyst estimates compiled by Bloomberg.

Manufacturing in China, Taiwan’s biggest overseas market, expanded for a third straight month, based on the Purchasing Managers’ Index, adding to evidence of a recovery in the global economy. The island’s industrial output rose at the fastest pace in nine months in November, with production of chemical materials gaining 7.3 percent from a year earlier.

“There are signs that demand is coming back,” said Filoli Tsai, a Taipei-based analyst at IBTS Investment Consulting Co., who rates Formosa Plastics neutral. “There’s been some restocking for commodities.”

Chemical producer Formosa Chemicals & Fibre Corp. (1326) turned to a pretax profit of NT$3.4 billion in the fourth quarter from a loss of NT$2.21 billion a year earlier. The average of nine analyst estimates compiled by Bloomberg was for a pretax profit of NT$3.6 billion.

Plastics processor Nan Ya (1303) Plastics Corp. reported a pretax profit of NT$136 million, compared with a loss of NT$1.57 billion a year earlier. Seven analysts had expected an average profit of NT$2.85 billion.

Oil refiner Formosa Petrochemical Corp. (6505) posted a pretax profit of NT$1.98 billion. The average of eight analyst estimates compiled by Bloomberg was for a profit of NT$6.18 billion. The company reported a loss of NT$4.39 billion a year earlier.

Formosa Petrochemical’s fourth-quarter earnings were eroded by the reduced value of stockpiles after crude oil prices dropped, Lin Keh-yen, a spokesman for the company, said in a press conference in Taipei today.

To contact the reporter on the story: Yu-huay Sun in Taipei at ysun7@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net


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