PetChem’s 3Q profit up 2.5% to RM913m


Petronas Chemicals Group Bhd (PetChem) announced a 2.47% increase in net profit of about RM913 million from the previous RM891 million declared in the corresponding quarter last year, for its third quarter (3Q) ended Sept 30, 2017.Mainly contributed by higher product prices and volumes, as well as the strengthening of US dollar, the integrated chemical producer’s revenue increased by 12.6% from RM3.56 billion to RM4.01 billion in the same quarter of last year.

The group said in a filing with Bursa Malaysia yesterday that the production and sales volumes growth are mainly contributed by its Sabah Ammonia Urea (Samur) plant which commenced commercial operation in May.

“In tandem with higher crude oil price, the overall average product price has improved,” it said in a statement. Plant utilisation of 82% compared to 100% in the corresponding quarter, as a result of statutory turnaround activities undertaken at its derivatives plant, was recorded by the olefins and derivatives segment.

The fertilisers and methanol segment reported a lower plant utilisation of 88%, a decline from 96% compared to the corresponding quarter, mainly due to statutory turnaround activities for its ammonia plant.

The Samur plant, however, has helped in hiking the production and sales volumes.

Meanwhile, because of better performance by both its core segments, PetChem posted a 62.6% increase in net profit from RM1.95 billion to RM3.17 billion year-to-date (YTD) which ended on Sept 30.

Its revenue YTD also jumped 27.78% from RM9.91 billion to RM12.67 billion in the same period last year.

The company’s operational results are primarily influenced by global economics that include petrochemical products prices which have a high correlation to crude oil prices, particularly for the olefins and derivatives segment, as well as the utilisation rate of its production facilities.

The utilisation of its production facilities is dependent on plant maintenance activities and sufficient availability of feedstock, as well as utilities supply.

“The group foresees the olefins and derivatives market to stabilise soon, drawing support from higher feedstock prices, partially negated by seasonal low demand in China.

“The fertilisers segment is expected to be supported by the demand from the agriculture sector, together with the shortage of supply from the Middle East. On the other hand, methanol prices are expected to stabilise, owing to regional supply shortage alongside stable downstream demand,” PetChem concluded.