The improvement is mainly attributed to higher sales volume, stronger US dollar and improved prices
By NG MIN SHEN
Petronas Chemicals Group Bhd’s (PetChem) net earnings for the second-quarter ended June 30, 2017 (2Q), doubled to RM964 million from RM462 million recorded a year ago, as a result of its increased production and sales volume.
PetChem said in an exchange filing yesterday that its revenue for the quarter under review grew to RM3.96 billion, versus RM3.2 billion registered the year before.
The improvement is mainly attributed to higher sales volume, stronger US dollar and improved product prices from higher crude oil prices.
With the commencement of commercial operations at its Sabah ammonia and urea (Samur) plant in May 2017, group production and sales volume grew with overall group plant utilisation of 90% for the quarter.
Excluding Samur, plant utilisation stood at 89% in the 2Q versus 95% the year prior due to higher level of maintenance activities.
Earnings before interest, tax, depreciation and amortisation grew 26% to RM1.52 billion from RM1.2 billion previously, attributed to higher volumes, favourable foreign-exchange impact and lower operating expenditure.
The group declared an interim dividend of 12 sen per share for the quarter, translating to a total dividend payout of RM960 million.
PetChem stated that its future operations are expected to be primarily influenced by global economic conditions, utilisation rates of its production facilities and petrochemical products prices which are highly correlated to crude oil prices, particularly for its olefins and derivatives segment.
“The utilisation of our production facilities is dependent on plant maintenance activities and sufficient availability of feedstock, as well as utilities supply,” PetChem’s statement read.
The company also expects plant utilisation levels to be slightly lower than in 2016 due to higher statutory turnarounds planned in the 3Q of 2017, coinciding with bearish market conditions.
The olefins and derivatives market is anticipated to firm in the near term, supported by the tight supply condition from scheduled turnarounds and increased demand from restocking activities.
For fertilisers, an overall bearish undertone is projected as demand slows amid a supply glut, while methanol prices are forecast to be stable largely on healthy downstream demand and cheaper feedstock prices.