Formosa Plastics Q3 Profit Jumps Despite Operating Loss
Formosa Plastics Corp. (TWSE: 1301) reported a consolidated net profit of NT$19.66 billion for the first nine months of 2026, a significant jump from the same period last year, despite recording an operating loss of NT$2.63 billion. This apparent disconnect between operational performance and overall profitability underscores the impact of factors beyond core manufacturing, such as investment income and financial gains.
The company’s revenue for the first nine months of 2026 totaled NT$133.54 billion, while the gross profit reached NT$6.56 billion. However, the operating loss of NT$2.63 billion demonstrates underlying challenges in the company’s core business. The substantial net profit of NT$19.66 billion, translating to a basic earnings per share of NT$3.09, was driven by a tax-adjusted profit of NT$19.54 billion, suggesting significant non-operating income sources contributing to the bottom line. Total assets at the end of the period stood at NT$859.18 billion, with total liabilities at NT$178.48 billion and equity at NT$680.71 billion.
Alongside the earnings report, Formosa Plastics announced that its board approved loans totaling NT$32.25 billion to five affiliated companies – Nan Ya Plastics, Taiwan Chemical Fibre, Formosa Petrochemical, Formosa Heavy Industries, and Formosa Construction. These loans, intended for working capital, represent 4.74% of the company’s net equity. While the loans are secured by no collateral, they are limited to a one-year term with the borrowing companies retaining the right to repay at any time. The approval of these substantial loans suggests a strategic shift in internal financing, potentially leveraging the parent company’s strong financial position to support operations within the broader Formosa Plastics Group.
The combination of strong profit figures alongside operating losses and increased lending to affiliates paints a complex financial picture. The reliance on non-operating income to drive profitability, coupled with a rise in intra-group lending, warrants further scrutiny as the company navigates evolving market conditions and geopolitical uncertainties.