FPG’s 4 major entities’ 4Q18 profit drop 90% QoQ

4 major entities of Formosa Plastics Group (FPG) announced their 4Q18 earnings report today on January 8th. FY18 revenue reached NTD157.38bn (+16.3% YoY). Their net profit was NTD210.941bn (-11.5% YoY). Due to the plunge in oil prices, the net profit fell by more than 90% QoQ. Formosa Chemicals & Fibre (1326-TW) earned a total of NTD8.34 per share in FY18 and was listed as the top profitable share. Formosa Plastics Group’s (1301-TW) EPS was NTD7.78, the second highest in its history. Due to sharp drop in international oil prices, Formosa Petrochemical (6505-TW) loss NTD0.44 per share in 4Q18.

Formosa Plastics Group

Formosa Plastics Group’s 4Q18 consolidated revenue was NTD56.352bn (-1.8% QoQ), the second highest in its history. Its net profit was NTD2.28bn (-87.4% QoQ) with EPS of NTD0.36. Its FY18 revenue reached NTD230.3bn (+11.4% YoY), setting a new record high. Its FY18 net profit was NTD49.5bn (+0.2% YoY) with EPS of NTD7.78, the second highest in its history.

Formosa Plastics pointed out that due fully-loaded capacity production and robust demand of PVC in India, the sales increased. However, due to US-China trade war, the international oil price fell, making the price of petrochemical products weaker, its 4Q18 revenue reduced by 1.8% QoQ. In terms of profitability, due to the following: a) lack of cash dividend income, b) the recognition of the income from the USA dropped c) the recognition of loss of NTD1.13bn, Formosa Plastics’ profit was significantly lower QoQ.

Nan Ya Plastics

Nan Ya Plastics'(1303-TW) consolidated 4Q18 revenue was NTD77.696bn (-10.4% QoQ). Its net profit was NTD4.328bn with EPS of NTD0.55. Its FY18 revenue was NTD335.58bn (+8.8% YoY), set a new record high. Its FY18 net profit was NTD 52.743bn (-3.3% YoY) with EPS of NTD6.65.

Nan Ya Plastics pointed out that due to US-China trade war and international oil prices drop, its 4Q18 revenue of various products decreased. The chemical products’ profit dropped due to the rapid decline in oil prices. Although Nanya Technology (2408-TW) contributed the revenue by NTD2.32bn, the loss of NTD960mn from Formosa Petrochemical was recognized, resulting in a decline in profitability.

Formosa Chemicals & Fibre

Formosa Chemicals & Fibre's 4Q18 consolidated revenue was NTD101.571bn (-5.6% QoQ). Its net profit was NTD1.63bn (-91.7% QoQ) with EPS of NTD0.44. Its FY18 revenue was NTD407.86 bn (+13.8% YoY), the second highest in its history. Its FY18 net profit was NTD48.642bn (-10.6% YoY) with EPS of NTD8.34.

Formosa Chemicals & Fibre pointed out that affected by the US-China trade conflict, customers were conservative about the market conditions. The selling price fell, causing the revenue to decline QoQ. Due to the sharp drop in oil prices, the price of finished products decreased, resulting in a sharp drop in operating profit. In addition, Non-operating revenue decreased by NTD13.64bn QoQ.

Formosa Petrochemical

Formosa Petrochemical' 4Q18 consolidated revenue was NTD19.022bn (-4.5% QoQ). Its net loss was NTD 4.18bn with LPS of NTD0.44, the first loss for four years. Its FY18 consolidated revenue was NTD675.547bn (+23% YoY). Its FY18 net profit was NTD600.56bn(-25.1% YoY) with EPS of NTD6.34.

Taiwan Plastics pointed out that refinery business revenue decreased by 4.2% QoQ, due to the decline in international oil prices. Although the capacity utilization rate of olefins business was higher QoQ, the ASP plunged due to the prices decline of raw material Naphtha, resulting in its 4Q18 revenue to decline 6.0% QoQ.