FCFC — Interim / Quarterly Report 2018

Aug 29, 2018

FORMOSA CHEMICALS & FIBRE CORPORATION

2018 1H Operations Results

Aug.30,2018

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.

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Statements of Comprehensive Income
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(In NT$ billions unless otherwise noted)

1H 2018 1H 2017 Sales Revenue 198.7 171.4 COGS (168.7) (148.1) Gross Profits 30.0 23.3	HoH 15.9% 28.8%	2Q 2018 1Q 2018 99.7 99.0 (85.5) (83.2) 14.2 15.8	QoQ 0.7% -10.1%
Gross Margin 15.1% 13.6%		14.3% 15.6%
Operation Expense (7.3) (6.8) Operation Income 22.6 16.5	37.0%	(0.36) (0.37) 10.5 12.1	-13.2%
Operating Margin 11.4% 9.6%		10.5% 12.2%
Total non-operating income and expenses 13.3 9.9 Income Tax Expense 35.9 26.4 Net Income 30.6 23.4	34.3% 35.9% 30.8%	9.2 4.1 19.7 16.2 16.2 14.3	124.4% 21.6% 13.3%
Net Profit Margin 15.4% 13.7%		16.2% 14.4%
EPS(NT Dollar) 4.67 3.45*	35.4%	2.45 2.22	10.4%

*Profit attributable to common shareholders of the parent

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Consolidated Revenue Analysis
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HoH
(In NT$ billions) +15.9% 198.7
171.4
200.00 QoQ
+0.7%
99 99.7
100.00
0.00
1H17 1H18 1Q18 2Q18
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 Revenue increased 27.3bn in 1H2018 with 15.9% growth HoH:

Production & Sales Volume Increased +8.9bn:

Due to less scheduled maintenance work compare to 1H2017(ARO-3 only in 1H2018). Price Spread +18.4bn:

Petrochemical and plastics prices raised reflect higher oil prices and strong demand from downstream.

• Revenue increased 0.7bn in 2Q2018 with 0.7% growth QoQ: Production & Sales Volume Slightly Decreased -2.4bn:

Due to the scheduled maintenance of ARO-3.

Price Spread +3.1bn:

High oil price drive up the Petrochemical and plastics prices.

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Revenue Breakdown by Division

1H17 (1H17 Net Sales:NT$171.4 billion)

1H18 (1H18 Net Sales:NT$198.7 billion)

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Formosa Formosa Formosa
Formosa Advanced Taffeta Advanced
Taffeta Technology Co. Technology
Co. Co. 9.2% Co.
10.1% 2.4% Others 2.2% Petro-
Petro- 13.8%
chemicals
Others
chemicals
45.1%
13.3%
43.4%
Plastics Plastics
30.8% 29.7%
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 Petrochemical :

Revenue of petrochemical 89.6bn represents 45.1% among total sales. Petrochemical 、 increased YoY mainly due to the growing sales of PX SM and PHENOL.  Plastics: Focusing on customized and High-value-added Plastics Products, our sales of plastics products was 59 bn accounts for 30% of total sales with 6.2bn increased HoH.  Main revenue in the next few years is still driven by petrochemical and plastics products which account for 74.8% consolidated revenue in 1H2018.

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Revenue Breakdown by Geography

1H17

1H18

(1H17 Net Sales:NT$171.4 billion)

(1H18 Net Sales:NT$198.7 billion)

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Europe Others
Americas
Rest of 1.6% 0.3% 0.2% Americas Europe Others
Asia Rest of 1.9% 0.2% 0.2% China
China Asia (HK.
13%
(HK. 14.7% &Mac.
&Mac. included)
Overseas included) Overseas 41.3%
59.2% 58.3%
44.1%
Domestics
Domestics
40.8% 41.7%
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 China(Hong Kong &Macau included) plays an important role regionally and represent 44.1% in 1H17 and 41.3% in 1H18 of total sales respectively.

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Operating Profits Analysis
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YoY
(In NT$ billions)
+22%
66.7
80.00
54.70
HoH
60.00
+35.9% 35.9
26.4
40.00
20.00
0.00
2016 2017 1H17 1H18
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• 2017 pre-tax income increased 12bn with 22% growth YoY:

1.Profits spread of petrochemical and plastics expand 5.4bn due to rising oil price, strong demand from downstream and restriction on scrap plastic imports from China. 2.Gain on sales of stock (Nanya Technology Co.) and land(Pingtung xin yuan ) total 2.66bn.

1. Cash dividend increased 1.22bn and exchange losses decreased, total gain 1.22bn.

2. 1H2018 pre-tax income increased 9.5bn with 35.9% growth HoH: 1.Operating income increased 6.1bn:

High oil price drive up the petrochemical and plastics prices in 1H2018 and maintenance 、 work of ARO-3 SM-3 finished in 1H2017.

2.Non-Operating income increased 3.4bn ：

Equity income increased 2.3bn, exchange gain increased 2.3bn and cash dividend decline 1.5bn(Due to ex-dividend date of FPC in July but June in 2017).

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Operating Profits Breakdown by Division

-20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 70.9% 28.4% 60.1% 57.8%65.3% 55.4% 23.3% 36.1% 32.2% 36.2% 30.8% 28.5% 3.9% 6.4% 2.0% 2.8% 2.3% 3.4% 2.7% 5.9% 2.4% 2.7% 2.9% 4.6% -0.8% 23.2%3.3% 0.5% -1.3% 8.1% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Petrochemicals Plastics Formosa Taffeta Co., Ltd. Formosa Advanced Technologies Co. Others	11.6% 2.6% 9.6% 9.2% 10.2% 8.3% 9.5% 5.6% 11.6% 12.9% 11.1% 8.8% 5.6% 3.4% 2.6% 4.2% 3.2% 3.8% 15.1% 14.0% 13.3% 16.8%17.2% 21.8% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Petrochemicals Plastics Formosa Taffeta Co., Ltd. Formosa Advanced Technologies Co.

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Financial Summary
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(In NT$ billions unless otherwise noted)

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428.0
450 401.5
358.4
400 10.29
329.3 319.2
350
8.35
300
Sales Revenue
250 5.41
Pre-tax Profits
4.56
200 EPS(NTD)
150 2.4
66.7
100
54.7
30.3 36
15.7
50
0
2013 2014 2015 2016 2017
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Capacity Expansion Plan
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01[China(Ningbo) ]

	Product Capacity (KT/Year)	Capacity Planning (KT/Year)	Capacity Increase(%)	Completion Date
	MX/PIA -	13.5/20	-	2020/03
	Phenol 30	44	47%	2020/05
	Acetone 18.5	27.2	47%	2020/05
	America(Louisiana)
	Product	Capacity Planning (KT/Year)		Completion Date
	EG(stage1)	90		2023/08
	PP	60		2024/01
	EG(stage2)	90		2028/12

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Q&A

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

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Notes accompany this presentation. Please select Notes Page view.
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Such approvals may be requested via e-mail—vendor.relations@gartner.com.
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