FCFC Chairman Apologizes for First Loss Since Listing, Eyes Second-Half Recovery

Formosa Chemicals & Fibre Corporation (FCFC) has reported its first-ever loss since its stock market debut, a situation Chairman Hong Fu-yuan addressed with an apology to shareholders. The company faced significant challenges last year, including severe price competition from China's overcapacity in various products and disruptions to its supply chain caused by U.S. tariffs implemented in April of the previous year.

During the shareholders' meeting, Hong Fu-yuan and General Manager Lu Wen-jin acknowledged the difficult period. They presented a strategy centered on differentiated products and expansion into high-margin composite materials. The company is also exploring new, promising business ventures to drive future growth.

Lu Wen-jin noted a significant improvement in the first quarter of the current year, with earnings per share exceeding NT$1, surpassing the previous year's performance. This turnaround was partly attributed to rising international oil prices following the conflict between the U.S. and Iran, which boosted light oil and chemical prices. The company also benefited from managing low-cost inventory.

Looking ahead, FCFC anticipates its second-quarter revenue to remain stable compared to the first quarter, despite a potential reduction in volume differences, as price differences are expected to increase. The company plans to maintain stable supply to key clients and manage inventory carefully to mitigate risks associated with high raw material costs and price declines. For the second half of the year, FCFC projects performance to be comparable to the first half, expressing cautious optimism due to the ongoing shortage of petrochemical supplies outside China and the potential for improved margins.

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Last year, due to the impact of overcapacity in China and severe low-price competition for various products, coupled with the U.S. initiating equivalent tariffs in April, the stable supply chain was disrupted, resulting in the first loss since listing.