Formosa Chemicals & Fibre (1326) Q2 2026 earnings summary

Executive summary

• Sales revenue in 1H2026 reached NT$168.9 billion, up 11% year-over-year, with net profit at NT$13.05 billion, reversing a net loss in 1H2025.

• Gross margin improved to 7% from 2.4% year-over-year, reflecting better product mix and higher selling prices.

• Revenue growth was driven by higher crude oil and petrochemical prices amid geopolitical tensions and product mix optimization.

• Comprehensive income for the period reached NT$181.2 billion, reflecting strong gains in financial assets and equity investments.

• The review report was qualified due to certain subsidiaries and equity-method investments not being reviewed by independent auditors, representing up to 20% of consolidated assets and up to 28% of comprehensive income in prior periods.

Financial highlights

• 1H2026 operating profit was NT$5.05 billion, compared to a loss of NT$2.97 billion in 1H2025.

• Net profit margin improved to 7.7% from -4.9% year-over-year.

• EPS for 1H2026 was NT$2.23, compared to -NT$1.27 in 1H2025.

• 2Q2026 sales revenue increased 6.7% sequentially from 1Q2026, but net profit remained flat at NT$6.5 billion.

• Cash and cash equivalents at June 30, 2026 were NT$18.4 billion.

Outlook and guidance

• Geopolitical events, such as the U.S.-Iran conflict, are expected to continue impacting crude oil and feedstock prices.

• Product mix optimization and flexible production strategies are expected to support profitability.

• The company adopted new IFRS standards in 2026, with no significant impact expected from future standards.

• Management continues to focus on capital structure optimization and maintaining a low debt-to-capital ratio (16% as of June 30, 2026).