PetChem records RM4.2b profit for 2017

By MARK RAO & RAHIMI YUNUS / Pic By ISMAIL CHE RUS

Petronas Chemicals Group Bhd (PetChem) ended 2017 on a high note as its net profit grew by 42.5% to RM4.2 billion from RM2.9 billion in the previous year.

PetChem saw its revenue increasing 26% to RM17.4 billion, primarily driven by higher production and sales volume as global economies and crude oil prices are improving.

Production volume has increased following the commercialised 1.9 million metric tonnes of annual production capacity from Petronas Chemical Fertiliser Sabah Sdn Bhd’s Sabah Ammonia Urea project, or known as Samur.

As for its fourth quarter ended Dec 31 last year (4Q17), the largest chemical producer in Malaysia reported a net profit growth of 1.3% to RM1 billion against RM987 million in 2016.

“2017 has been a remarkable year for us. We have achieved record earnings amid a challenging environment, where the average crude oil price per barrel remained in the mid-US$50 (RM195) range,” PetChem MD and CEO Datuk Sazali Hamzah (picture) said in a statement yesterday.

Moving forward, the company expects its operations to be primarily influenced by global economic conditions, utilisation rate of production facilities and petrochemical products’ prices, which have a high correlation to crude oil prices.

PetChem said it will continue with its operational excellence programme and supplier relationship management to sustain plant utilisation at above industry level.

For the olefins and derivatives segment, the group foresees the market to strengthen in the near term, supported by limited supply due to regional turnarounds, healthy demand for the upcoming festive season and higher feedstock prices.

The fertiliser segment is set to benefit from the limited supply in the Middle East, boosted by the return of demand in Asia.

Methanol prices are also forecast to strengthen, owing to a healthy downstream demand and tight supply in China.

As for its joint venture with BASF SE on specialty chemicals, PetChem said the progress is on track.

“The highly reactive polyisobutene (HR-PIB) plant in Gebeng, Pahang, has come on stream, while the startup of the new integrated aroma ingredients complex has been initiated in phases, and is currently conducted in a step-wise approach,” Sazali said.

The Pengerang Integrated Complex is also progressing at 70% of completion.

The company declared a 15 sen dividend in 4Q17, amounting to a total payout of RM1.2 billion to be paid on March 21 this year.

PetChem’s share price closed unchanged yesterday at RM8.10 apiece, with a market capitalisation of RM64.8 billion.