Formosa Chemicals & Fibre : Declare of FCFC’s Consolidated Profit and Loss in the 2nd Quarter of 2022

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Provided by: FORMOSA CHEMICALS & FIBRE CORPORATION
SEQ_NO	2	Date of announcement	2022/07/11	Time of announcement	13:33:20
Subject	Declare of FCFC's Consolidated Profit and Loss in the 2nd Quarter of 2022
Date of events	2022/07/11	To which item it meets	paragraph 51
Statement	1.Date of occurrence of the event:2022/07/11 2.Company name:FORMOSA CHEMICALS & FIBRE CORPORATION 3.Relationship to the Company (please enter "head office" or "subsidiaries"):head office 4.Reciprocal shareholding ratios:N/A 5.Cause of occurrence:Declare of FCFC's Consolidated Profit and Loss in the 2nd Quarter of 2022 6.Countermeasures:none 7.Any other matters that need to be specified: I.Comparison of consolidated profit and loss in the 2nd quarter and the 1st quarter of 2021： 1.Operating revenue increased 12.39 billion in the 2nd quarter than in the 1st , with a growth rate of 13.0%. Among the increase, sales volume accounted for 3.65 billion and the price supported the rest 8.74 billion. 2.Aspect of sales volume (1)FCFC：+6.2 billion An increase of 6.59 billion could be traced back to the increasing production of PX whose processing margin had a significant improvement as well as the sales of raffinate to FPCC. Other than that, phenol and acetone resumed to their standard performance from the overhaul in the first quarter, generating an extra 1.08 billion. As for SM, internal consumption of Ningbo was cut down to support its export, amounting an extra sales of 0.94 billion. However, overhauls of PTA and PP affected the sales of 2.15 billion. ABS was also affected by the pandemic of mainland China, resulting in a decrease of 0.96 billion. (2)FCNB：-1.41 billion Plant PTA had undergone its overhaul in the 2nd quarter, affecting 2.5 billion. Besides, PS, ABS and phenol dropped by 0.62 billion due to the pandemic. Yet, sales of raffinate and the reconciliation of PIA brought 1.75 billion to the total sales. (3)Other subsidiaries： Sales of FIPC dropped as the market demand went weak, affecting 0.64 billion. Decrease also happened to FICC as it was scheduled for a facilitiy check-over, decreasing by 0.29 billion. In addition to that, revenue of FTC shrank by 0.16 billion as clients shifted their orders from S/S to A/W. 3.Impact of selling price variance： Quotations of ABS and phenol were affected by Chinese cities' lockdown and the weak demand. Aside from that, most of the products prices were pushed up as a result of the Russia Invasion. II.Consolidated profit before income tax in the 2nd quarter of 2022 was 8.55 billion, increasing by 0.38 billion with a growth rate of 4.6% compared with the last quarter. Reasons are as follows： 1.Operating margin decreased 2.51 billion： Affected by the Russia Invasion and the supply chain imbalance, inflation got worse. Thus, rate rise which is an inevitable measure for the worldwide is adopted by the central banks to fight the inflation. Also, Chinese government's Zero-Covid policy and the shrinking processing margin affected the operating profit on a seasonal basis. Trend to protect the economy worldwide which slows down the economy growth, affecting the operating margin. 2.Consolidated non-operating profit increased by 2.89 billion (1)Cash dividends jointly increased by 2.83 billion. (FPCC 1.39 billion; NTC 1.24 billion; FPC (US) 0.17 billion) (2)Investment profit of Equity Method increased by 0.67 billion. FPCC accounted for 1.29 billion while MLPC and FHI decreased by 0.44 and 0.23 billion respectively. (3)Profit of exchange decreased by 0.53 billion. (0.44 billion/2022 Q2; 0.97 billion/ 2022 Q1) 3.Net profit after income tax attributed to owners of the parent in the 2nd quarter was 6.2 billion 98.16 million. Profit Attributable to Common Shareholders of the Parent was NTD 1.07, NTD 0.03 more than the 1st quarter with a growth rate of 2.9%. II.Comparison of consolidated profit and loss in the first half year of 2022 and in 2021： 1.Operating revenue increased 23.2 billion in 1H of 2022 than in 2021, with a growth rate of 12.9%. Among the increase, the sales amount decreased by 4.19 billion yet the price raise supported the rest 27.35 billion instead. 2.Aspect of sales volume (1)FCFC：-4.94 billion An increase of 6.21 billion could be traced back to the overhauls of PX, phenol, PP, PIA as well as the decreasing sales of raffinate to FPCC. ABS was confronted with the lockdown, driving the demand small, affecting 1.45 billion. Reconciliation of BZ was conducted, decreasing the sales by 1.03 billion. As for SM, internal consumption of Ningbo was cut down to support its export, amounting an extra sales of 3.8 billion. (2)FIC in Vietnam：-1.05 billion Poly and yarn decreased by 0.68 billion as the clients turned conservative toward the market. Hours of the electricity grid dropped, decreasing by 0.58 billion. Affected by the lockdown, nylon chip dropped by 0.34 billion. SPP chip gained 0.41 billion from the export develoement. (3)FTC：-0.7 billion Tire cord was affected by the market demand, dropping by 0.87 billion. Sales of long fiber fabric increased by 0.34 billion as it's favored by the branding orders. (4)FCNB：+2.32 billion New facility of PIA was put into production, bringing 4.61 billion. On the other hand, PTA was scheduled for overhaul, affecting 2.34 billion. 3.Aspect of Selling Price Driven by the post-pandemic demand, supply imbalance and the Russia Invasion, inflation was triggered. However, acetone, ABS, PC and acetic acid were exempted owing to the lockdown and new productivity competition. 2.Consolidated profit before income tax in 1H of 2022 was 16.71 billion, decreasing by 16.54 billion compared with 1H of 2021. 1.Operating margin decreased 19.6 billion Although the price of oil and the raw materials soars, price of the products are contrarily limited as a result of the new productivity and the shrinking processing margin. Besides, rate rise is an inevitable trend to protect the economy worldwide which slows down the economy growth, affecting the operating margin. 2.Consolidated non-operating profit increased by 3.06 billion: (1)Cash dividends jointly increased by 2.83 billion. (FPCC 1.39 billion; NTC 1.24 billion; FPC (US) 0.17 billion) (2)Profit of exchange increased by 1.93 billion. (1.41 billion/1H2022; -0.52 billion/1H 2021) (3)Investment profit of Equity Method decreased by 1.76 billion. (MLPC -1.19 billion ; FHI -0.3 billion; FPCC -0.25billion) 3.Net profit after income tax attributable to owners of the parent in H1 was 12.3 billion 58.94 million. Profit attributed to common shareholders of the parent was NTD 2.11 per share, NTD 2.21 less than 1H2021.