Shutdowns at Formosa Petrochemical affect sales, revenues of affiliates

07-Sep-11

Formosa Petrochemical Corp has reported the largest drop in monthly revenue among the Formosa Plastics Group's four core companies, as per stock exchange filing. August revenues fell 56.8% sequentially to NT$33.27 bln (US$1.14 bln) on lower capacity utilization and oil product sales due to the recent partial shutdowns of its refining units in Mailiao. Formosa Petrochemical runs 3 crude distillation units in Mailiao and the refinery accounts for nearly 70% of its total sales. It also operates 3 naphtha crackers there, accounting for about 25% of total sales. Formosa Petrochemical's revenue dropped 29.6% on an annual basis as the plants stopped operating for 20 days in August because of several industrial safety mishaps, causing oil products sales to fall 76% from July. Sale of ethylene and propylene also witnessed a fall in August with the annual maintenance shutdown of the No. 3 naphtha cracker mid-month. Formosa expects refinery revenue to recover this month with the restart of 2 crude distillation units and processing rates expected to rise to 400,000 bpd of crude oil in September. The company is expected to resume all operations, including 3 refinery plants and 3 naphtha crackers, by the end of this month. The lower feedstock supply from Formosa Petrochemical also impacted its affiliates. Formosa Plastics Corp, the group's flagship company, saw sales last month fall 6.8% month-on-month to NT$15.82 bln and 12% year-on-year, while Formosa Chemicals and Fibre Corp, which produces aromatics and styrenics, reported a revenue drop of 7.7% to NT$21.64 bln from the previous month and a decline of 3.7% from a year earlier. Nan Ya Plastics Corp, Taiwan's largest plastics maker, reported a sequential revenue rise of 10.1% to NT$15.6 bln last month, but sales were down 17.3% from one year ago. The group's four core companies posted a combined revenue of NT$86.3 bln last month, down 34.4% month-on-month and 19.36% year-on-year. Revenues in the first eight months of the year reached NT$1.02 trillion, up 3.4% from a year earlier.