PetChem Q2 net profit falls slightly to RM1.12b

Petronas Chemicals Group Bhd (PetChem) recorded a slightly lower net profit of RM1.12 billion in the second quarter ended June 30, compared with RM1.44 billion secured in the same period last year, amid declining crude oil price and softer market demand.

Revenue slipped eight per cent to RM4.34 billion for the quarter under review, from RM4.73 billion a year ago.

“The lower revenue was mainly due to lower product prices, partially offset by higher sales volume and the weakening of the ringgit against the US dollar,” said the group in a filing with Bursa Malaysia yesterday.

PetChem said the revenue of olefins and derivatives segment declined to RM2.35 billion in the second quarter from RM2.75 billion in the same period last year, while revenue for the fertilisers and methanol segments slipped to RM1.98 billion from RM2 billion previously.

Both segments were lower due to a decline in product prices, partially offset by higher sales volume and the weakening of ringgit versus US dollar, said the company.

PetChem said the results of its operations were expected to be mainly influenced by global economic conditions, foreign exchange rate movements, utilisation rate of its production facilities and petrochemical products prices, which have a high correlation to crude oil prices, particularly for the olefins and derivatives segment.

“The utilisation of our production facilities is dependent on plant maintenance activities, sufficient availability of feedstock and supply of utilities.

“The group will continue with its operational excellence programmes and supplier relationship management to sustain plant utilisation levels at above the industry benchmark,” it added.