FCFC — Call Transcript 2022

Apr 26, 2022

FORMOSA CHEMICALS &

FIBRE CORPORATION

2021 Result Conference

==> picture [71 x 34] intentionally omitted <==

----- Start of picture text -----

FCFC
----- End of picture text -----

==> picture [62 x 31] intentionally omitted <==

APR 27,2022

Disclaimer

• The information provided in the document, other than number and data of financial reports, has not been audited or reviewed by any accountant or any independent third party. FCFC does not ensure the fairness, completeness and accuracy of the information.

 This document may contain forward-looking statements, including but not limited to statements that address activities, events or developments that FCFC expects or anticipates to occur in the future. All statements are based on FCFC’s plan and best knowledge toward the future while subject to various factors and uncertainness beyond FCFC’s control. Therefore, the actual results may differ materially from those contained in the forward-looking statements.

 This document does not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to buy any securities or financial instruments.

• This material must not be copied, reproduced, distributed or passed to others at any time, in whole or in part, without the prior written consent of FCFC.

2

Consolidated Financial Performance

(Amount: NT$ billion)	2021	2020	YoY	4Q2021	3Q2021	QoQ
Sales Revenue	365.8	253.3	44.4%	94.7	91.1	4.0%
COGS	(312.4)	(223.8)		(86.2)	(80.7)
Gross Profits	53.4	29.5	81.0%	8.5	10.4	(18.3%)
Gross Margin	14.6%	11.6%		9.0%	11.4%
Operating Expense	(19.0)	(14.2)		(5.3)	(5.0)
Operating Profit	34.4	15.3	124.8%	3.2	5.4	(40.7%)
Operating Margin	9.4%	6.0%		3.4%	5.9%
Non-Operating Profit (Loss)	15.8	9.5	66.3%	2.0	6.3	(68.3%)
Profit Before Tax	50.2	24.8	102.4%	5.2	11.7	(55.6%)
Net Profit	42.7	21.6	97.7%	4.4	10.4	(57.7%)
Net Profit Margin	11.7%	8.5%		4.6%	11.4%
EPS(NTD)	6.56	3.34		0.61	1.63

3

Change in Consolidated Revenue –QoQ

(In NT$ billion)

• Sales Revenue

• Operation Income

Consolidated revenue increased 3.6bn in 4Q2021, up 4.0% compared to 3Q2021.

 Volume variance+2.9bn :

94.7

91.1

3.2

5.4

3Q2021 4Q2021

In terms of petrochemical plastic products, PTA, PIA, HAC, PP and PC Plant have completed their regular inspections, and production and sales are normal in Q4. As for textile and fibers products, overall benefit from the increased demand in A/W peak season as we ll as the relaxation of epidemic prevention control in Vietnam.

 Price variance+0.7bn :

Price of PTA, ABS, PP and PC were weak because of weak demand and new line. competitors’ production Other than that, most of the petrochemical and plastic products performed better as a result of the rising pric es of crude oil and raw materials.

4

Change in Consolidated Revenue –YoY

(In NT$ billion)

• Sales Revenue

Consolidated revenue increased 112.5bn in 2021 compared to in 2020, representing 44.4% growth rate.

 Operation Income

 Price variance +92.5bn

365.8

Quotations were much affected last year by the pandemic. This year, climate anomalies and the facility failure made the supply tighter bringing the quotations of petro produ cts high.

253.3

 Volume variance +20.0bn

15.3

34.4

Market demand recovered from the COVID pandemic, in creasing the sales of aroma, SM, phenol, PTA and ABS. In addition, expansion of plant phenol and PIA in Ningbo had come to complete and started production .

2021

2020

5

- Change in Profit Before Tax - QoQ

(In NT$ billion)

Profit Before Tax decreased 6.5bn(-55.6%) in 4Q2021 compared to 3Q2021.

• Sales Revenue

 Profit Before Tax

94.7

91.1

 Operating income -2.2bn Production cost went up as a result of rising price of oil and coal. Additionally, clients tend to purchase in a con servative way because of the uncertainty resulting from China's “dual-control” implementation. Thus, some of t he product’s price and the processing spread went down, affecting the quarterly income.

 Non-Operating income -4.3bn 1.Cash dividend decreased 3.1bn.

11.7

3Q2021

5.2

4Q2021

2.Equity income decreased 1 bn. (E\I from FIPC and Mai-Liao Power corp. decreased 0.71bn and 0.23bn respectively.)

6

- Change in Profit Before Tax - YoY

(In NT$ billion)

 Sales Revenue

 Profit Before Tax

Profit Before Tax increased 25.4bn in 2021 compared with 2020, representing 102.4% growth rate.

253.3

365.8

 Operating income +19.1bn This year, the economies have recovered from the trough although the epidemic still caused imbalances in supply chain. Demands remained conservative, even it had rebo unded. The prices of raw materials and products fluctuate d, and the processing spread went narrowed. Even so, the operating profit was better than last year.

 Non-Operating income +6.3bn

24.8

2020

50.2

2021

1.Equity income increased 8.8bn. 2.Dividends income decreased 2bn.

3.Gain on disposal of asset decreased 0.7bn.

7

==> picture [780 x 312] intentionally omitted <==

----- Start of picture text -----

Revenue Breakdown by Segment
2020 2021
Petrochemicals 38.90% 44.40%
Plastics 35.30% 35.00%
Others 17.40% 14.00%
Formosa Taffeta
8.40% 6.60%
Co., Ltd.
----- End of picture text -----

 Petrochemical : Sales of petrochemical products is 162.5bn, an increase of 64bn or 65% over the same period in 2020. This year is due to the impact of post-epidemic demand recovery, mon etary easing, and rising oil prices, resulting in both price and volume rising; accounting for 44.4 % , an increase of 38.9% from 2020.



2020 with a growth rate of 43%. The increase is mainly due price rises in its raw materials. Its percentage of total sales is 35.0%, which is down slightly compared to last year.

 largest contributor to Company’s consolidated revenue in 2021.

8

Revenue Breakdown by Geography

2020

Sales Revenue:NT$253.3billion

2021

Sales Revenue:NT$365.8billion

China(HK,Mac included):43.9% Rest of Asia:15.2% Americas:1.6% Europe:0.3% Others:1.1% Overseas:62.1%

China(HK,Mac included):42.9% Rest of Asia:12.0% Americas:3.6% Europe:0.7% Others:0.9% Overseas:60.1%

==> picture [262 x 152] intentionally omitted <==

----- Start of picture text -----

TW,
37.9%
Overseas
, 62.1%
----- End of picture text -----

==> picture [276 x 150] intentionally omitted <==

----- Start of picture text -----

TW,
39.9%
Overseas
, 60.1%
----- End of picture text -----

 China (including Hong Kong and Macau) is still our main market, accounting for 42.9% of revenue in 2021, down from 45.3% and 43.9% in 2019 and 2020, while the Americas and Europe both increased slightly.

9

Operating Profits Breakdown by Division

Operating Profit %

% change in Operating Margin

==> picture [679 x 332] intentionally omitted <==

----- Start of picture text -----

120%
10.7% 25%
7.6% 4.6%
8.8% 1.1%
20.5%
100%
19.1%
20%
17.5%
80% 14.9%
49.5% 15%
46.2%
76.3% [103.6%]
60% 10.8%
71.5%
9.5% 9.0%
10%
93.1%
8.0%
40%
4.3%
5%
45.9% 43.1% 22.6% 1.8%
20% 1.8%
1.1%
0.8%
20.9% 0.1% 0.5%
11.7% -0. 3%
0%
0% -1.9% 0.8%
-0.6%
-15.3% -5%
-20%
3Q20 4Q20 1Q21 2Q21 3Q21 4Q21
3Q20 4Q20 1Q21 2Q21 3Q21 4Q21
----- End of picture text -----

Petrochemicals Plastics Others

Petrochemicals Plastics Others

10

Capacity Expansion Plans

China(Ningbo)

PTA Capacity: Current 1,200 KT Addition 1,500 KT Completion date:2023/Q2

ABS

Capacity: Current 500 KT Addition 250 KT Completion date:2022/Q2

11

Q&A

To Learn more about FCFC, Please visit www.fcfc.com.tw

==> picture [780 x 39] intentionally omitted <==