by PRIYA VASU / pic by TMR FILE
PETRONAS Chemicals Group Bhd’s net profit jumped 188% to RM1.46 billion in the first quarter of 2021 (1Q21) compared to RM506 mil posted a year earlier driven by improvements in both crude oil and petrochemicals prices boosted by recovery in global demand and supply disruptions.
In a filing to Bursa Malaysia today the group noted revenue for the quarter was higher by RM784 million or 20% at RM4.7 billion largely due to higher product prices.
“In addition to improved crude oil prices, average product prices moved upward, higher than expected, by 20% to 30% due to tight supply of products stemming from the US winter storms in February. This resulted in improved margin across all our product segments, including those of our joint ventures and associate companies,” said CEO, Datuk Sazali Hamzah in a separate statement.
Olefins and Derivatives segment recorded comparable plant utilisation rate, production and sales volumes as compared to the corresponding quarter as revenue was higher by RM452 million or 19% at RM2.9 billion as a result of higher product prices.
Fertilisers and Methanol segment’s operational performance recorded lower plant utilisation rate of 84% compared to 90% in the corresponding quarter mainly due to higher level of maintenance and statutory turnaround activities resulting in lower production and sales volumes.
Average product prices for the segment were higher amid global supply disruptions and demand recovery.
The segment’s revenue increased by RM304 million or 24% at RM1.6 billion primarily attributed to the improved product prices.
“While the market is still bullish, product prices have begun to moderate as demand normalises. Given the healthy demand for our products, we are optimistic for a better performance in 2021. However, given the resurgence of COVID-19, we will remain vigilant of changes in the market,” said Shazali on PCG’s outlook.
He added the key focus for PCG in 2021 is to maintain operational efficiency, as several of the group’s production plants across Malaysia are scheduled for major statutory maintenance and turnaround this year.
“With the successful completion of the statutory turnarounds in Methyl Tertiary Butyl Ether / Propane Dehydrogenation (MTBE/PDH) plant in Kuantan and Methanol Plant 1 in Labuan in May, the Group will endeavour for the remaining turnarounds to be conducted successfully within the second half of the year,” Shazali added.
Commenting on the Group’s growth strategy Sazali said that pursuing investments in both basic and specialty chemicals will continue to be the priority despite market challenges.
Pengerang Integrated Complex (PIC), expected for a full startup in the second of 2021.