PetChem posts higher profit in 2Q22

by AUFA MARDHIAH / pic credit: Petronas

PETRONAS Chemicals Group Bhd (PetChem) saw its profit for the second quarter ended June 30, 2022 (2Q22), stood at RM1.87 billion against RM1.86 billion in 2Q21.

Meanwhile, the group’s revenue for 2Q22 was at RM6.58 billion against RM5.6 billion in the same quarter for the previous year.

In a filing to Bursa Malaysia, PetChem’s total gross revenue for the period under review was RM13.23 billion compared to RM10.31 billion in the same quarter for the previous year.

The company’s gross revenue per segment for the period under review includes — olefins and derivatives at RM6.02 billion (against RM5.91 billion in 2Q21), fertilisers and methanol at RM6.13 billion (RM3.8 billion in 2Q21) and others at RM1.08 billion (RM595,000 in 2Q21).

“On review of group performance in the current period under review, PetChem recorded a lower plant utilisation rate of 72% compared to 97% in the corresponding quarter mainly due to higher plant statutory turnaround and maintenance activities resulting in lower production and sales volumes.

On the other hand, revenue was higher by 17% (RM975 million) at RM6.6 billion largely due to higher product prices in tandem with the improved crude oil price amid tight supply, partially offset by lower sales volumes.

Meanwhile, the group’s Ebitda dipped by 9% (RM186 million) at RM2 billion mainly due to lower volumes. However, profit after tax (PAT) slightly improved by 1% (RM16 million) at RM1.9 billion following higher foreign-exchange (forex) gain on revaluation of shareholder loan to a joint operation company,” said the group in its report.

On the segment’s operational performance, olefins and derivatives performance recorded a lower plant utilisation rate of 89% (compared to 98% in the corresponding quarter) mainly due to higher maintenance activities resulting in lower production and sales volumes. Revenue was higher by 7% (RM213 million) at RM3.3 billion primarily due to higher product prices, partially offset by lower sales volumes.

Meanwhile, the segment’s Ebitda dipped by 10% (RM106 million) at RM965 million following lower volumes. However, the segment’s PAT was slightly lower by RM4 million at RM954 million in line with lower Ebitda partially offset by higher forex gain on revaluation of shareholder loan to a joint operation company.

For fertilisers and methanol, the segment also recorded a lower plant utilisation rate of 62% (compared to 96% in the corresponding quarter) due to higher plant statutory turnaround and maintenance activities resulting in lower production and sales volumes. Revenue increased by 26% (RM589 million) at RM2.8 billion primarily attributed to the higher product prices — partially offset by lower sales volumes.

Ebitda for the segment dipped by 9% (RM93 million) at RM1 billion mainly due to lower volumes. The segment’s PAT also dipped by 13% (RM120 million) at RM792 million in line with lower Ebitda.

On the group’s prospect, PetChem expects the group’s operating results to be influenced by several factors – global economic conditions; petrochemical product prices that have a high correlation with crude oil prices, especially for the olefin and derivatives segment and the utilisation rate of production facilities; as well as forex rate movements.

“The utilisation of our production facilities is dependent on plant maintenance activities and sufficient availability of feedstock, as well as utilities supply. PetChem will continue with its operational excellence programme and supplier relationship management to sustain plant utilisation level at above industry benchmark.

The Covid-19 pandemic continues to affect the global economy and the market will remain volatile. PetChem will navigate market uncertainties by leveraging its operational and commercial excellence.

The group anticipated product prices for olefins and derivatives to remain stable amidst balanced supply with demand recovery. Fertiliser and methanol product prices on the other hand are expected to be moderately supported by high crude oil prices,” said the group.

On dividend paid for the period under review, PetChem has declared a second interim single tier dividend of 23 sen per ordinary share which amounted to RM1.84 billion to shareholders on March 25, 2022.