PetChem delivers RM1.9 bln PAT in 3Q22
Petronas Chemicals Group Bhd (PetChem) continues to record strong earnings for the financial year ending December 31, 2022 (FY22).
Third quarter (3Q22) revenue grew 22 per cent year-onyear on the back of higher average product prices amid stronger US Dollar, coupled with improved production and sales volumes.
Profit after tax (PAT), however, declined 3 per cent year-on-year to RM1.9 billion, due to softer margins and lower contribution from joint ventures and associates.
On a cumulative nine-month basis, the group’s revenue and PAT, increased by 26 per cent and 11 per cent, to RM20.2 billion and RM5.8 billion respectively, against the same period last year.
Revenue increased by 22 per cent to RM7 billion, driven by higher product prices amid stronger US dollar, coupled with higher sales volume.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) declined by seven per cent to RM2 billion due to lower product spreads. EBITDA margin declined to 28 per cent during the quarter.
Profit after tax (PAT) declined 3 per cent to RM1.9 billion in line with softer margins and lower contribution from joint ventures and associates.
Plant utilisation rate improved to 97 per cent contributing to higher production and sales volumes.
Managing director/chief executive officer, Mohd Yusri Mohamed Yusof commented, “Product prices remained elevated during the quarter supported by high crude oil and energy prices, though lower than 2Q22.
“Production and sales volumes improved this quarter with our plant utilisation rate improved to 97 per cent from 72 per cent in 2Q22.
Approximately 70 per cent of PetChem’s production volume is exported within the Asia Pacific region, of which, Southeast Asia make up about 40 per cent. Yusri noted that, “While the stronger US dollar boosted our revenue, we faced margin pressure as a result of higher operating costs.”
Commenting on the market, “We are seeing softened demand, particularly for polymer
Product prices remained elevated during the quarter supported by high crude oil and energy prices, though lower than 2Q22. Production and sales volumes improved this quarter with our plant utilisation rate improved to 97 per cent from 72 per cent in 2Q22.
Mohd Yusri Mohamed Yusof
products, as high cost of energy persists amid extended Covid-19 lockdowns across China.
“Having declined to 2021 levels in recent weeks, the prices of olefins and derivatives are expected to moderate further until the easing of restrictions in China.
“However, urea prices are expected to remain high between US$550 per metric tonne to US$700 per metric tonne as energy prices remain elevated due to the ongoing RussiaUkraine war.”
Updating on its growth initiatives, Yusri said “In October, we welcomed Swedish-based Perstorp Holdings AB (Perstorp) into the PetChem family. We look forward to preserving and growing the value of Perstorp Group, focusing on delivering existing business plan targets while maximising the synergies with PCG.”
A well-established specialty chemicals company with presence in Europe, US and Asia Pacific, Perstorp is a strategic fit in PCG’s specialty chemicals expansion and decarbonisation plans.