Hengyuan post massive RM640m net loss in Q3 

PORT DICKSON-based Hengyuan Refinery Company Bhd (HRC) posted a massive net loss of RM640.48 million for the third quarter ended Sept 30, 2022 (3Q22), attributed to adverse refining margin.

It was more than 118 times the RM54.04 million net loss in the same quarter the year before, according to its exchange filing yesterday (Nov 29).

The company said the loss was attributable to adverse refining margin as compared to a more favourable refining margin during 3Q21.

“Adverse refining margin was mainly affected by sharp reduction in cracks especially for Mogas [motor gasoline], coupled with higher crude premium incurred as well as higher stockholding losses due to significant drop in product prices during the quarter. These factors led to a net loss for 3Q 2022,” it said in the filing.

For the quarter under review, Hengyuan Refinery returned a revenue of RM5.03 billion, up 55% from the year, supported by a 51% surge in the market product prices at an average price of US$124 (RM559.05) per barrel as compared to US$82 per barrel in the corresponding period in 2021.

Sales volume in 3Q 2022 was comparable to the corresponding period in 2021. Sales volume in 3Q 2022 was affected by production downtime, while sales volume in 3Q 2021 was a result of low activities during Movement Control Order (MCO) period, it said.

For the nine months, the group posted net profit of RM74.46 million compared to a net loss of RM97.11 million in the same period in 2021.

It said the 2022 year-to-date net profitability was squeezed by both higher foreign exchange losses and higher finance cost as compared to the same period in 2021. Higher foreign exchange losses arose from the strengthening of USD against RM by 11%, while finance cost almost doubled due to aggressive interest rate hike, it added.

Revenue for the cumulative period increased to RM16.88 billion from RM7.95 billion driven by higher product prices and sales volume. – TMR / pic TMR File