Petronas Chemicals 4Q16 earnings up 40 pct to RM987 mln
KUCHING: Petronas Chemicals Group Bhd (Petronas Chemicals) earnings for the fourth quarter of 2016 (4Q16) ended December 2016 jumped by 40 per cent year-onyear (y-o-y) to RM987 million from RM704 million recorded in 4Q15.
The company in its accounts notes filed to the stock exchange yesterday said earnings before interest, tax, depreciation and amortisation (EBITDA) surged RM464 million or 46 per cent to RM1.5 billion on higher sales volumes, lower unit cost, favourable spreads and stronger US dollar.
As a result, the group registered higher earnings in 4Q16.
Petronas Chemicals’ revenue grew by RM498 million or 14 per cent to RM3.9 billion as compared to RM3.45 billion in 4Q15 as a result of higher volume and stronger US dollar resulted from foreign exchange translation.
In addition, the company said it achieved very strong operational performance with higher plant utilisation of 96 per cent as compared with 86 per cent in the corresponding quarter on the back of improved plant reliability and higher methane supply to its methanol facilities.
Consequently, Petronas Chemicals noted both production and sales volumes were higher.
Nonetheless, the company said the overall average product prices were lower as compared with the corresponding quarter due to lower fertiliser and methanol prices.
Elaborating further, its olefins and derivatives (O&D) segment recorded exceptional operational performance with 100 per cent plant utilisation for the quarter ended December 2016 as compared to 95 per cent in the corresponding quarter ended December 2015.
It observed production and sales volumes were higher in line with improved plant utilisation.
The company also observed that average product prices increased with the recovery in crude oil prices.
As a result of higher volumes and prices, Petronas Chemicals noted the revenue for the O&D increased by RM392 million or 16 per cent to RM2.8 billion.
Moreover, Petronas Chemcials said the segment’s EBITDA was higher than corresponding quarter by RM287 million or 37 per cent at RM1.1 billion, driven by higher spreads, higher volume and stronger US dollar.
Correspondingly, the company noted profit after tax for the segment also rose by RM128 million or 22 per cent to RM706 million.
Apart from that, Petronas Chemicals disclosed that its fertilisers and methanol (F&M) segment registered significantly higher plant utilisation of 89 per cent for 4Q16 as compared with 79 per cent in 4Q15 attributed to higher methane supply to the methanol facilities.
As a result of improved plant utilisation, the company said both production and sales volumes increased.
On another note, Petronas Chemicals said the average product prices for F&M softened as market conditions remained challenging.
It added methanol price firmed in line with crude oil price coupled with tight regional supply whilst ammonia and urea prices were adversely affected by oversupply in the market following new capacity additions.
Despite market headwinds, revenue for the F&M segment increased by RM91 million or nine per cent to RM1.1 billion as a result of higher volumes and stronger US dollar.
Correspondingly, the EBITDA and profit after tax for the segment improved by RM87 million or 26 per cent to RM425 million and by RM85 million or 35 per cent to RM331 million respectively.
As for financial year 2016 (FY16) ended December 2016, Petronas Chemicals said the group’s revenue grew by 2.4 per cent y-oy to RM13.86 billion whilst FY16 earnings increased by 5.4 per cent y-o-y to RM2.93 billion.