12 October 2010 04:56 [Source: ICIS news]
By Nurluqman Suratman
FPC last week posted a 49% year-on-year drop in net income to new Taiwan dollars (NT$) 6.8bn ($220m, €158m) in the third quarter, while sales fell 12 % year on year to NT$158.2bn as a result of the recent fires in Mailiao, they said.
“A major reason behind the drop in revenue was the shutdown at the 540,0000 bbl/year refinery in Mailiao,” said Taipei-based Alden Lin, a petrochemical analyst at brokerage house KGI Securities.
“The refinery has yet to start up and this has decreased shipments. Also,
FPC shut its refinery in Mailiao after an oil leak triggered a fire at its No 2 residue desulfurization unit on July 25. Two of the refinery’s three crude units have since started production, according to local media.
“FPC’s earnings should improve next quarter once the (No 2) cracker is back in operation,” said Danny Ho, an analyst at brokerage house Yuanta Securities in
The refinery was expected to be fully operational by the middle of October which would help boost earnings in the fourth quarter, added Lin of KGI Securities.
The company’s 700,000 tonnes/year No 1 cracker has also been suspended since a blaze on 7 July, while its 1.03m tonnes/year No 2 cracker is currently shut for maintenance since 5 October.
While the No 2 cracker was expected to come back on stream in the middle of November, there has been no fixed date as to when the No 1 cracker could come back on stream, analysts said.
“It is up to the government now to release the (No 1) cracker from suspension and give it back its operating permit,” Ho from Yuanta Securities said.
However, FPC could face further delays in obtaining approvals from the government to restart the cracker after another fire broke out at
“The fire at Nan Ya made it even more complicated for FPC now,” he added.
In the January to September period of this year, FPC posted a 3.4% year-on-year drop in its net income, parent company
Earnings at Formosa’s other business units also reported an increase for the same period as improved economic conditions boosted demand for chemicals and polymers, the firm said.
FPG subsidiary Formosa Plastic Corp’s net income during the January to September period rose 67% year on year to NT$33.2bn, while Nan Ya Plastics Corp’s profit more than tripled to NT$32.4bn, according to FPG.
Formosa Chemical and Fibre’s net income meanwhile fell 8.1% year on year to NT$11.4bn, it said.
($1 = NT$30.9, €0.72)
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