KUALA LUMPUR: Petronas Chemicals Group Bhd
said it has yet to see a meaningful recovery, despite some uplift in demand from China, post-Chinese New year, for selected chemicals.
According to managing director and CEO Mohd Yusri Mohamed Yusof, the overall chemicals sector remains cautious given the volatile energy prices although there have been some positive movements in selected regions in the first quarter.
He added that operating costs have increased due to the effects of inflation on gas and fuel giving rise to energy and utilities costs, further narrowing product spreads and adding pressure on margins.
However, he added that gas and utilities costs are expected to ease in the coming quarters.
"We continue to be cautious on the outlook for 2023, given the recent developments of the US banking sector and its potential impact to the global economy, the prolonged Russia-Ukraine conflict as well as lower than expected China recovery," he said in a statement.
In the first quarter of the financial year ended March 31, 2023, PETRONAS Chemicals recorded a net profit of RM532mil, down from RM2.08bil in the year-ago quarter.
The group's earnings per share fell to seven sen from 26 sen in the comparative quarter.
Meanwhile, revenue was up to RM7.56bil from RM6.63bil.
Moving forward, Mohd Yusri said that for the immediate term, the group is focusing on ensuring optimal plant efficiency and commercial excellence to cushion the impact of a likely downturn.
For the longer term, he said the chemical industry is expected to continue its growth trajectory of about 3% per annum, driven by rising consumption in a wider number of expanding industries including pharmaceuticals, automotives and construction.
"PETRONAS Chemicals has mapped out its sustainable growth plan for both basis and speciality chemical value chains to capture future demand," he said.
