The four major units of Formosa Plastics Group (FPG, 台塑集團), the nation’s largest industrial conglomerate, on Wednesday reported their net profits last quarter all fell from the previous quarter due to a decrease in non-operating income and the impact of foreign exchange losses.
This quarter, the four units — Formosa Plastics Corp (台灣塑膠), Nan Ya Plastics Corp (南亞塑膠), Formosa Chemicals and Fibre Corp (台灣化學纖維) and Formosa Petrochemical Corp (台塑石化) — are expected to see their operations affected by low oil prices and weak seasonal demand for oil products, analysts said.
Factors such as soft petrochemical demand amid a slow China recovery, disruption during the Lunar New Year holiday and fierce market competition amid new capacity ramp-up in foreign markets would also weigh on the units’ business performance, they added.
Photo: Taipei Times File Photo
“In the mid-to-long term, we anticipate a weak demand recovery overall, given persistent sector oversupply as China and the US continue to ramp up new capacity,” Yuanta Securities Investment Consulting Co (元大投顧) analysts said in a research note on Thursday. “For this year, with demand to recover as inventory adjustment ends, we expect Formosa Plastics, Nan Ya Plastics and Formosa Chemicals to see sales and earnings improve. However, carbon fee levies from this year will negatively impact earnings.”
During the October-to-December quarter, Formosa Plastics swung into a net loss of NT$2.88 billion (US$92.52 million) due to annual maintenance and demand weakness, as well as narrower investment gains, while Nan Ya Plastics saw its net profit contract 96.8 percent sequentially to NT$140 million on fewer investment gains and higher foreign exchange losses, the companies said in separate regulatory filings.
Formosa Chemicals’ net profit plunged 99.2 percent quarter-on-quarter to NT$574 million, hit by weakened demand and oversupply in China, coupled with narrower investment gains. Formosa Petrochemical’s net profit also fell 91.7 percent to NT$1.43 billion in the past quarter, given a slump in oil prices, narrower refinery and olefin product spreads, and inventory impairment and foreign exchange losses, their filings showed.
The FPG units posted a combined net profit of NT$44.01 billion last year, down 51.2 percent from a year earlier, as their operating income turned from profit to loss amid a negative macroeconomic environment that led to lower product prices and smaller sales volumes.
The four units' combined operating profit plunged 82.7 percent year-on-year to NT$58.96 billion, while revenue fell nearly 18 percent to NT$1.83 trillion compared with a year earlier.
Formosa Plastics, the group’s flagship company, reported its net profit last year fell 79.7 percent from the previous year to NT$7.35 billion, or earnings per share (EPS) of NT$1.15, and Nan Ya Plastics, the nation’s largest plastics maker, saw its net profit drop 80.4 percent to NT$6.31 billion, or EPS of NT$0.8.
Formosa Chemicals, which manufactures aromatics and styrenics, said its net profit grew 15.3 percent to NT$8.49 billion, or EPS of NT$1.45.
Formosa Petrochemical, the nation’s only listed oil refiner, reported its net profit rose 51.6 percent to NT$21.86 billion, or EPS of NT$2.3.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would
RSS