By AZALEA AZUAR
Petronas Chemicals Group Bhd’s (PetChem) first quarter (1Q) was hit by weaker prices and sales volume, with net profit falling 24.69% year-on-year (YoY) to RM802 million for the period ended March 31, 2019.
In a filing statement to Bursa Malaysia last Friday, the downstream business of national oil company Petroliam Nasional Bhd (Petronas), experienced a 17% YoY drop in revenue to RM4.13 billion as a result of lower product prices and sales volume caused by the weaker ringgit.
The group’s average product prices dropped from the preceding quarter because of the decreasing price of crude oil.
“PetChem recorded lower plant utilisation of 95% compared to 100% in the corresponding quarter, mainly due to higher level of maintenance and statutory turnaround activities at its methanol and aromatics plants respectively. Sales volume was lower in line with lower production,” it said.
Profit after tax also reduced by 27% YoY to RM813 million as a result of lower tax expense.
“Sales volume decreased mainly for methanol and aromatics due to higher level of maintenance and statutory turnaround activities. This was partially offset by higher volume for urea as the preceding quarter was affected by turn- around activities,” the group stated further.
Total assets decreased 2% to RM36.6 billion compared to RM27.3 billion in its preceding quarter.
“This was due to the decrease in cash and cash equivalent following dividend payment to shareholders and capital investment in the petrochemicals projects within Pengerang Integrated Complex, partially offset by profit generated during the period,” the group commented on the total assets loss.
The group’s total equity has also recorded a 3% loss to RM30.4 billion caused by the dividend payments on profit generated during the period.
“Net cash used in financing activities for the period was RM1.5 billion due to dividend payment to shareholders.”
The net cash generated in the corresponding quarter was RM2 billion following loan drawdown by a subsidiary, partly caused by the acquisition of shares held by a non-controlling interest in certain subsidiaries.
The olefins and derivatives segment maintained 100% of its plant utilisation, but decreased in production and sales volume because of statutory turn- around activities undertaken at its aromatics plant.
Its fertilisers and methanol segment’s operational performance was reduced to 92% of its plant utilisation on maintenance activities at its methanol plants.