PCG Profits Tumbles A Massive 72% To RM1.8 Billion

Petronas Chemical Group said it recorded lower plant utilisation rate of 84% as compared to 100% in the corresponding quarter mainly due to higher statutory turnaround and plant maintenance activities during the quarter resulting in lower production & sales volumes.

Revenue was lower by RM1.5 billion or 17% at RM7.2 billion largely due to lower product prices and sales volume,
partially offset by revenue contribution from joint operation entity. EBITDA was lower by RM1.1 billion or 62% at RM655 million mainly due to lower product spreads and sales volume. Profit after tax decreased by RM342 million or 71% at RM142 million in line with lower EBITDA, partially offset by lower unrealised foreign exchange loss in relation to shareholder’s loans and remeasurement gain on trade payables amounting to RM114 million.

For the full year, revenue was comparable at RM28.7 billion despite lower product prices, as these were partially offset by revenue contribution from Perstorp and a joint operation entity. However, EBITDA was lower by RM4.3 billion or 53% at RM3.8 billion, which it said was mainly due to lower product spreads. Profit after tax also decreased by RM4.6 billion or 72% at RM1.8 billion in line with lower EBITDA.

PCG said the results of the group’s operations are primarily influenced by global economic conditions, petrochemical products prices which have a high correlation to crude oil price, particularly for the Olefins and Derivatives segment, utilisation rate of our production facilities and foreign exchange rate movements. The utilisation of our production facilities is dependent on plant maintenance activities and sufficient availability of feedstock as well as utilities supply.

The Group anticipates product prices for olefins & derivatives to stabilize on returning supply after regional plant maintenance. Fertiliser and methanol product prices are forecast to soften amidst off planting season and ample
methanol supply from the Middle East. For specialties, the Group expects a gradual recovery and growth in sales and earnings in view of the slight pickup in end market demand amid the volatile and uncertain environment.

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