PetChem’s Q3 net profit slips to RM553m
KUALA LUMPUR: Petronas Chemicals Group Bhd’s (PetChem) net profit fell 54 per cent to RM553 million for the third quarter ended Sept 30 this year from RM1.21 billion in the same period last year.
The group, in its filing with Bursa Malaysia yesterday, said revenue fell to RM3.67 billion from RM4.83 billion previously.
This was due to the lower product prices, partially offset by higher sales volume and the weakening of the ringgit against the US dollar.
The lower net profit was partially offset by lower tax expense, said PetChem.
“The group recorded a plant utilisation rate of 81 per cent, which had improved from the corresponding quarter of 79 per cent, mainly due to better plant performance. Production and sales volumes increased.
“Overall average product prices for the group slipped from the corresponding quarter in tandem with declining crude oil prices and softer market demand,” it said.
PetChem said its operations were expected to be influenced by global economic conditions, foreign exchange rate movements, utilisation rate of its production facilities and petrochemical products prices that have a high correlation to the crude oil price, particularly for the olefins and derivatives segments.
“The utilisation of our production facilities are dependent on plant maintenance activities and the availability of feedstock as well as utilities supply.
The group will continue with its operational excellence programme and supplier relationship management to sustain plant utilisation level at above the industry benchmark.
PetChem managing director and chief executive officer Datuk Sazali Hamzah said the results demonstrated its resilience and continued focus to deliver value through effective turnaround management and high plant reliability resulting in higher utilisation rate for the period, which exceeded world-class operating benchmark.
“The petrochemical product prices have stabilised but the market outlook remains soft due to lower global gross domestic product growth and expect additional capacities coming onstream, resulting in a long market. However, market fundamentals remained strong in the Asia-Pacific region.
“Given our robust business model and competitive position, we will continue to sustain the business and creat value through existing operations while pursuing our growth agenda,” said Sazali.
Its new plants in the Pengerang Integrated Complex are nearing completion and remain on track to commence commercial operations by the end of the year.
“We are now in the process of stabilising the plants to deliver additional capacity of a new product range to meet customers’ requirements,” he said.
PetChem has announced a first interim dividend of 11 sen per share for the year, amounting to RM880 million.