Formosa Plastics Group's four major companies earned over NT$100 billion in the first half of the year, with Nan Ya Plastics contributing nearly half of the earnings per share.

(CNA, reporter Tseng Jen-kai, Taipei, July 9) The "Formosa Four" companies today announced their self-assessed profits for the second quarter. The combined after-tax net profit attributable to the parent company for the four major companies was NT$64.276 billion, a quarterly increase of 45.5%. This marks a turnaround from a net loss of NT$25.07 billion in the same period last year. The cumulative self-assessed after-tax profit for the Formosa Four in the first half of the year reached NT$108.453 billion.

Among them, Nan Ya Plastics, benefiting from the strong demand for various electronic materials driven by AI, announced its second-quarter net profit attributable to the parent company was NT$26.753 billion, a quarterly increase of 87.7%. Its earnings per share after tax were NT$3.37, a historical high and the most outstanding performance. Nan Ya Plastics' cumulative earnings per share after tax for the first half of the year were NT$5.17, a substantial profit exceeding half of its share capital, a significant improvement from the net loss of NT$0.46 per share in the same period last year.

Nan Ya Plastics explained that its second-quarter operations reached a historical peak, mainly due to the AI wave, where cloud providers are accelerating the construction of hyperscale data centers with massive investments, leading to a surge in demand for various high-end materials in the supply chain. For example, in the PCB sector, upstream and downstream materials such as glass fiber cloth, copper foil, copper foil substrate, and ABF substrates have experienced unprecedented comprehensive supply shortages. Nan Ya Plastics, with its complete layout in related areas, has become a beneficiary.

Furthermore, in terms of investments, Nan Ya Plastics' subsidiary DRAM manufacturer Nanya Technology benefited from the widening memory supply-demand gap, leading to rapid profit growth. Income from Formosa Petrochemical also increased slightly compared to the first quarter. The combination of core business and non-operating income jointly propelled Nan Ya Plastics' second-quarter profits to a historical peak.

Formosa Plastics' second-quarter net profit attributable to the parent company was NT$10.652 billion, a substantial increase of 2.25 times compared to the first quarter, showing the strongest growth momentum. Its earnings per share after tax for the quarter were NT$1.68. In terms of its core business, Formosa Plastics' operating profit in the second quarter was NT$2.88 billion, an improvement from the net loss of NT$1.302 billion in the first quarter.

Formosa Plastics explained that the US-Iran war pushed up petrochemical prices. Formosa Plastics had low-cost inventory from the previous period, leading to a significant improvement in product profit margins. The core business turned profitable in the second quarter. In terms of non-operating income, Formosa Plastics recognized NT$8.35 billion in equity method investment income from entities such as Formosa Petrochemical, Formosa Plastics USA, and Formosa Olefins USA in the second quarter, an increase of NT$3.3 billion from the first quarter. Additionally, cash dividend income of NT$230 million in the second quarter contributed to the surge in profits.

Formosa Chemicals & Fibre Corporation announced its second-quarter net profit attributable to the parent company was NT$6.093 billion, a slight decrease of 2.4% compared to the first quarter. Its earnings per share after tax for the quarter were NT$1.04.

Formosa Chemicals & Fibre Corporation explained that the slight decrease in second-quarter profits compared to the first quarter was mainly due to the peace agreement reached between the US and Iran in June and the reopening of the Strait of Hormuz, which led to a decline in crude oil and petrochemical raw material prices. Some competitors engaged in price cutting, causing market price volatility. Customers adopted a wait-and-see approach, only replenishing based on immediate needs, which put pressure on product selling prices. Additionally, Formosa Chemicals & Fibre Corporation scheduled major unit overhauls in the second quarter, resulting in reduced production and sales volume, leading to a decrease in operating profit of approximately NT$1.2 billion compared to the first quarter.

Formosa Petrochemical's second-quarter net profit attributable to the parent company was NT$20.778 billion, a slight increase of 1.8% compared to the first quarter. Its earnings per share after tax for the quarter were NT$2.18.

Formosa Petrochemical analyzed that profits from its three major businesses – refining, olefins, and utilities – all increased in the second quarter compared to the first quarter. However, due to the US-Iran ceasefire agreement at the end of June, international oil prices declined. Formosa Petrochemical, in accordance with accounting standards, conducted inventory valuations at the end of the quarter. The second quarter recognized an inventory valuation loss of NT$3.23 billion, compared to an inventory valuation recovery gain of NT$380 million recognized in the first quarter, a difference of NT$3.61 billion, which unfavorably impacted Formosa Petrochemical's operating profit, a symbol of its core business, by NT$1.63 billion compared to the first quarter. However, Formosa Petrochemical's non-operating income in the second quarter increased by NT$1.98 billion quarter-on-quarter, offsetting the decrease in core business profits. (Editor: Chang Liang-chih) 1150709

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