PetChem earnings lower due to stronger ringgit
PETALING JAYA: Petronas Chemicals Group Bhd (PetChem) has reported lower earnings of RM1.065bil in its first quarter ended March 31, 2018 due to the strengthening of the ringgit against the US dollar and a foreign-exchange (forex) loss on its loans.
It said the earnings in the quarter fell 17.7% from RM1.295bil a year ago. Revenue, however, rose 5.4% to RM4.951bil from RM4.695bil a year ago. Earnings per share was at 13 sen compared with 16 sen previously.
PetChem achieved a plant utilisation rate of 100% compared to 99% a year ago due to better plant performance.
It said production and sales volumes rose mainly from urea production from Petronas Chemicals Fertiliser Sabah Sdn Bhd (formerly Samur project), which started commercial operations in May 2017.
It said overall average product prices strengthened from the previous corresponding quarter following the increase in the crude oil price.
Commenting on its revenue, PetChem said it increased by RM256mil or 5% primarily driven by higher sales volume and product prices, partially offset by the strengthening of the ringgit against the US dollar.
As for its earnings before interest, tax, depreciation and amortisation (EBITDA), it decreased by RM100mil or 5% to RM1.8bil.
It explained that while there was an increase in the sales volume and product prices, they were offset by the strengthening of the ringgit against the US dollar and a one-off adjustment relating to the under-accrual of manpower-related expenses in the previous periods.
“Profit after tax was also lower by RM274mil or 20% to RM1.1bil in line with the lower EBITDA, coupled with the impact of the forex loss on its shareholder loans pursuant to the divestment of a 50% equity interest in a subsidiary,” it said.
Commenting on olefins and derivatives, PetChem said the segment recorded a strong plant utilisation rate of 100% in the current and corresponding quarters.
“Production and sales volumes remained comparable for both quarters. Average product prices for the segment improved by about 10% in tandem with strengthening crude oil prices,” it said.
PetChem said that despite higher product prices and comparable sales volumes, revenue dipped 2% to RM3.2bil due to the strengthening of the ringgit against the dollar by 52 sen or 12%.
However, EBITDA fell 17% to RM1.1bil and profit after tax fell 23% to RM719mil due to the strengthening of the ringgit against the dollar as well as a one-off adjustment relating to the under-accrual of manpower-related expenses in the previous periods.
As for the fertilisers and methanol segment, it recorded a stronger operational performance with a plant utilisation rate of 100% compared to 96% a year ago.
Revenue rose 21% to RM1.8bil, boosted by higher sales volumes and prices, partially offset by the strengthening of the ringgit.
Profit after tax also rose by 25% to RM564mil.