Greetings to all our partners who have supported us throughout in the development of FPC and cared for its growth.

In 2024, due to interest rate cuts by central banks in Europe and the United States, and the continued economic growth in emerging countries such as India, the global economy maintained moderate expansion. In addition, the completion and commissioning of the Company's Ningbo Propane Dehydrogenation (PDH) plant provided sufficient propylene feedstock supply, and the completion of debottlenecking projects at Taiwan's PVC plants increased production and sales volume, resulting in a slight growth in the Company's consolidated revenue compared to 2023. However, due to the sluggish real estate market and weak domestic demand in Mainland China, petrochemical peers continued to add new capacity and export competitively, which lowered product prices. Combined with increased costs of feedstock such as ethylene and propylene, product spreads narrowed. Furthermore, the recognition of investment income and cash dividends from affiliated companies such as Formosa Petrochemical Corporation and Formosa Plastics Corporation, U.S.A. also decreased compared to 2023, resulting in the Company's first operating loss since its establishment in 2024.

In recent years, Mainland China has brought massive new petrochemical capacity online, terminated the Cross-Strait ECFA tariff preferences, and geopolitical risks such as the Russo-Ukrainian war and Middle East conflicts have escalated, causing feedstock and energy costs to soar. Along with the global trend of carbon reduction and coal phase-out, the Asian petrochemical industry generally faces market oversupply and the inability to pass on costs. To break through these challenges, in addition to optimizing and developing high-value-added and differentiated products on the foundation of our existing petrochemical core business to enhance product sales margins, the Company continues to diversify sales markets to Southeast Asia and South Asia. Meanwhile, with the completion and commissioning of the propylene storage tanks at Kaohsiung Intercontinental Container Terminal in the first quarter of 2024, as spot propylene prices were lower than contract prices, the Company has increased spot propylene imports. As ethylene refrigerated tanks and underground pipelines are scheduled for completion in 2025, the Company will flexibly increase spot procurement to reduce feedstock and transportation costs.

In addition, the Company established a Transition Development Team in January 2024, focusing on three major transformation directions: new product/new business development, energy, and digitalization. In new product/new business development, the Company is advancing toward the electronics/semiconductor, green energy and environmental protection, and healthcare industries. Currently, 17 forward-looking product technology transfer or collaborative development projects are being evaluated and expanded, and as some projects are completed and commissioned in 2025, they will help improve the Company's operating and financial performance. In energy transformation, in response to global carbon reduction trends and Taiwan's carbon fee implementation starting in 2025, and to meet stakeholders' expectations and requirements for the Company's sustainable transformation, the Company has initiated voluntary carbon reduction measures at various plants, gradually replacing coal-fired boilers with gas-fired boilers at utility plants, increasing the proportion of wind and solar green energy generation, enhancing renewable energy usage, and implementing other water and energy conservation measures to comply with the Ministry of Environment's 2030 carbon fee technical benchmark reduction rate requirements, advancing toward the "2050 Carbon Neutrality" goal.

In digital transformation, in addition to continuing to apply AI for production and sales optimization, improving output and quality, and reducing materials, energy consumption, and industrial safety and environmental protection costs, the Company aims for smart factories and digitalized operation management. It further promotes cross-unit integration of process AI, combines GPT for innovative application development, independently develops smart robot technology, and digitalizes industrial safety management to enhance operational management performance. By the end of 2024, a total of 450 development projects were proposed, with 258 completed, generating annual benefits of NT$830 million.

Having undergone 70 years since its establishment, the Company has long adhered to the founders' philosophy of "Perpetual Business Operation and Dedication to the Society." To fulfill social responsibilities and maintain good communication with all stakeholders, the Company has integrated the United Nations Sustainable Development Goals (SDGs) into daily operations. In the three major aspects of "Corporate Governance," "Environmental Sustainability," and "Social and Human Rights," the Company has established short-, medium-, and long-term goals and actively promotes sustainable initiatives in all aspects.

As of 2024, an investment of over NT$33 billion has been made in pollution prevention and control, energy conservation and waste reduction, greenhouse gas reduction, and improvement of industrial safety and fire protection. As a result, the treatment and emission of various pollutants were better than national regulatory standards. Regarding greenhouse gas inventory and reduction efforts, 2024 greenhouse gas emissions (Scope 1 and Scope 2), verified by an independent third party, totaled 7.55 million tons CO2e, representing an absolute reduction of 1.085 million tons CO2e compared to the baseline year (2020), a decrease of 12.6%. The emission intensity is 5,170.1 tons CO2e/NT$ 100 million, which is also lower than the baseline year's 6,205.4 tons CO2e/NT$ 100 million, a decrease of 16.7%. In terms of water and energy conservation and emission reduction performance, a total of 934 improvement projects were completed in 2024. As a result, we achieved a daily water saving of 2,100 tons and reduced annual greenhouse gas emissions by 188,000 tons CO2e. According to the CDP, an international environmental assessment indicator, the Company achieved the highest rating of A in climate change and water security evaluation in the 2024 assessment results. Following 2023, this marks two consecutive years of ranking among the leading chemical companies worldwide, demonstrating that FPC's efforts in addressing climate change and promoting a circular economy have produced favorable outcomes.

Meanwhile, in 2024, other sustainability initiatives have repeatedly received recognition from government agencies and credible civilian institutions. These include Mailiao MMA Plant, Mailiao EVA Plant, and Mailiao C4 Plant receiving awards as outstanding units for occupational safety and health performance in Yunlin County, and Mailiao AN Plant participating in the Yunlin Industry Excellence Awards, receiving the Environmental Sustainability Award and Carbon Excellence Gold Award. Furthermore, due to excellent net-zero carbon reduction performance, the Company was honored with the Outstanding Net-Zero Industrial Competitiveness Award by the 21st Century Foundation and was selected by Business Weekly as one of the 2024 Top 100 Carbon Competitiveness Companies. Moreover, the Company has received the "Gold Award" in the manufacturing sector from 1111 Job Bank as a "Happy Enterprise" for six consecutive years, highlighting recognition from employees in four major areas: comprehensive salary and benefits, work-life balance, healthy workplace creation, and talent career development. Additionally, the National Fire Agency, Ministry of the Interior awarded two honors: "Excellent Enterprise for Workplace Sustainable Health and Safety SDGs Disclosure Practice Guidelines" and "Excellent Fire Safety Manager," demonstrating FPC's efforts and dedication to building a happy, friendly, and healthy workplace.

Looking ahead to the new year, facing these unprecedented severe challenges, all colleagues will uphold an indomitable spirit of perseverance, courageously embrace change, and fully promote "transformation" to build a robust business foundation as the most important goal for future operations. We hope that through the aforementioned transformation strategies and various operational improvement measures to reduce production costs, enhance management efficiency, and create an environmentally friendly approach, we can escape the red ocean market and become a key driving force for sustained future growth. Under the tempering of the petrochemical industry's sluggish conditions, we aim to turn crisis into opportunity and help the Company's performance emerge from its losses. At the same time, we will continue to exert positive influence throughout the industrial supply chain, working hand in hand with upstream and downstream partners to promote various sustainability initiatives, continuously advancing toward the vision of environmental sustainability and contributing to the protection of our planet.