Formosa Plastics : Announcement of FPC unaudited consolidated results in Q2 2022

 Announcement of FPC unaudited consolidated
results in Q2 2022

1.Date of occurrence of the event:2022/07/11
2.Company name:Formosa Plastics Corporation
3.Relationship to the Company (please enter "head office" or
  "subsidiaries"):head office
4.Reciprocal shareholding ratios:N/A
5.Cause of occurrence: Announcement of FPC unaudited consolidated results
in Q2 2022
6.Countermeasures:None
7.Any other matters that need to be specified:
1. Compared unaudited consolidated sales in Q2 and Q1 2022:
(1). The consolidated sales of NTD 73.9bn in Q2 2022 increased by NTD 2.9bn
and was up 4.1% from Q1 2022. The reasons were as follows:
A. The sales spread of price increased by NTD 6.45bn.
The price of each product of the Company in Q2 2022 was up 3~32% from Q1
2022, given (1) the sharply increased crude oil price impacted by the war
between Russia and Ukraine, and (2) the traditional peak demand season in
Q2 pushed up the price of petrochemical products.
B. The sales spread of volume decreased by NTD 3.53bn.
The total sales volume of EVA, PE and PP of the Company in Q2 2022
decreased by 86,000 MT from Q1 2022, given (1) the Company lowered down
PE and PP operation rate, because the increased price of ethylene and
propylene overwhelmed against the which of products, (2) Linyuan PP plant
in turnaround made the sales and production volume decline, and (3) the
off-season demand of China EVA shoes industry.
(2). The operating income of NTD 15.2bn in Q2 2022 increased by NTD 1.9bn
and was up 14.8% from Q1 2022. The consolidated pre-tax income of NTD
25.3bn in Q2 2022 increased by NTD 5.5bn and was up 28.3% from Q1 2022
and the pre-tax EPS was NTD 3.97. The consolidated income after tax of
NTD 2.12bn in Q2 2022 increased by NTD 4.6bn and was up 27.9% from Q1
2022 and the after-tax EPS was NTD 3.33. The reasons were as follows:
A. The operating income in Q2 2022 increased from Q1 2022, given (1)
the caustic soda producers in Europe cut production because of the high
energy cost affected by the war between Russia and Ukraine, and (2) the
strong demand on the EVA solar cell encapsulation film, made the price
increase and enlarge the spread.
B. Investment income of NTD 6.6bn in Q2 2022 increased by NTD 1.1bn from
Q1 2022, given:
a. Investment income from Formosa Petrochemical Corporation was NTD 4.8bn
increased by NTD 0.89bn.
b. Investment income from Formosa Plastics Corporation, U.S.A. was
NTD 2.67bn increased by NTD 0.9bn, given (1) the reduced productions
from peers because of the delivery difficulty made the market supply
decrease, and (2) the increased demand pushed up each product price.
c. Investment income from Mailiao Power Corporation was NTD -0.74bn
decreased by NTD 0.44bn.
C. Cash dividends were NTD 2.2bn in Q2 2022.
D. The FX gain of NTD 0.88bn in Q2 2022 increased by NTD 0.01bn from
NTD 0.87bn in Q1 2022.
2. Compared unaudited consolidated sales in H1 2022 and 2021:
(1). The consolidated sales of NTD 144.9bn in H1 2022, which reached the
historical high amount during the same period, increased by NTD 12.6bn
and was up 9.6% from H1 2021. The reasons were as follows
A. The sales spread of price increased by NTD 18.3bn.
The price of each product of the Company in H1 2022 was up 8~125% from H1
2021, because the war between Russia and Ukraine affected the average
prices of Dubai crude oil, ethylene and propylene to increase 60.6%, 24.7%
and 16% in H1 2022, respectively, which pushed up the petrochemical
product price.
B. The sales spread of volume decreased by NTD 5.7bn.
The total sales volume of HDPE and PP of the Company decreased by 177,000 MT
from H1 2021, given (1) the Company lowered down the operation rate because
the high cost of ethylene and propylene made the variable cost of HDPE
and PP overwhelm their prices, and (2) Linyuan PP plant in turnaround made
the sales and production volume decline.
(2). The operating income of NTD 28.6bn in H1 2022 decreased by NTD 2.6bn
and was down 8.5% from H1 2021. The consolidated pre-tax income of NTD 45bn
in H1 2022 increased by NTD 2.3bn and was up 5.6% from H1 2021. The pre-tax
EPS was NTD 7.07. The consolidated after-tax income of NTD 37.7bn in H1 2022
increased by NTD 2.5bn and was up 7.3%. The after-tax EPS was NTD 5.93.
The reasons were as follows:
A. The operating income in H1 2022 decreased 8.5% from H1 2021, given (1)
the war between Russia and Ukraine pushed up the crude oil price, but the
demand in China was week, and (2) the increased price of ethylene and
propylene overwhelmed against the which of products, and narrowed down the
spread.
B. Investment income was NTD 12bn in H1 2022 increased by NTD 0.1bn from H1
2021, given:
a. Investment income from Formosa Petrochemical Corporation decreased by
NTD 0.1bn.
b. Investment income from Formosa Plastics Corporation, U.S.A. increased by
NTD 2.8bn, because the increased prices of each main product enlarged the
spread.
c. Investment income from Formosa Olefins, L.L.C. decreased by NTD 0.8bn.
d. Investment income from Mailiao Power Corporation decreased by NTD 1.1bn.
C. Cash dividends were NTD 2.2bn in H1 2022.
D. The FX gain of NTD 1.75bn in H1 2022 increased by NTD 2.29bn from the FX
loss of NTD 0.54bn in H1 2021.