PetChem 2Q earnings rise 24%

PETRONAS Chemicals managing director and chief executive officer Mazuin Ismail.

KUALA LUMPUR: Petronas Chemicals Group Bhd (PetChem) has stated it is contending with a more complex business landscape and heightened volatility in the chemicals industry marked by a long period of overcapacity and low demand.

Over the next few months, the petrochemicals group expects the olefins and derivatives segment will soften as supply returns following the end of regional shutdowns and despite downstream demand remaining weak.

It added the urea market is forecast to firm up as application in the agricultural sector picks up while supply availability continues to weigh on methanol.

The specialities chemicals segment is expected to see limited recovery in the second half of the year (2H24), as the global market conditions remain uncertain with ongoing geopolitical tension and continued slow recovery in market demand.

“Headwinds are expected to persist in the building and construction sector, while the automotive sector shows indications of flattish demand in 2H24, despite selective improvement in the consumer goods sector,” PetChem’s managing director and chief executive officer Mazuin Ismail noted in his comments accompanying the group’s latest results filing with Bursa Malaysia.

For the second quarter ended June 30, 2024 (2Q24), PetChem registered a 24% year-on-year rise in net profit to RM777mil or an earnings per share (EPS) of 10 sen as revenue grew by 9% year-on-year to RM7.73bil.

During the quarter, the plant utilisation rate improved to 89% from 87% in 1Q24 due to a marginal increase in production volume.

For the first half of the year (1H24), the group’s cumulative net profit amounted to RM1.45bil or EPS of 18 sen as compared to RM1.16bil or EPS of 15 sen in 1H23, on the back of revenue of RM15.23bil against RM14.67bil in 1H23.

The board of directors announced a first interim dividend of 10 sen per share, representing a payout of RM800mil or 55% of 1H24 earnings.

Mazuin said the group is steadfast in executing business excellence initiatives to maintain efficiency and profitability.