Petronas Chemicals' Q1 performance hurt by lower average prices

KUALA LUMPUR: Petronas Chemicals Group Bhd (Petchem), hit by lower average product prices, registered lower revenue and profit for the first quarter ended March 31 compared to a year earlier despite having higher production and sales volume.

The company reported a 19.2% drop in net profit year-on-year (y-o-y) for the quarter to RM672mil while revenue fell 17.5% to RM3.14bil.

Petchem recorded “significantly higher” plant utilisation at 90% for the quarter compared to 80% a year ago on the back of improved methane gas supply and better plant reliability at the group’s methanol facilities.

There were also no statutory turnaround activities during the quarter whereas the corresponding quarter had statutory turnaround activities at the group’s urea plant in Bintulu.

Although production and sales volumes rose in line with better plant utilisation, market conditions continued to be challenging. Both olefins/derivatives and fertilisers/methanol segments recorded lower average realised product prices amid a lower crude oil price environment.

However, the fertilisers and methanol segment managed to grow 20% in net profit to RM290mil.

Meanwhile, group revenue was down due to the lower average realised product prices offsetting higher sales volumes and favourable exchange rate movement, Petchem said.

Profit for the quarter was lower mainly due to narrower product spreads. Accordingly earnings before interest, taxes, depreciation, and amortisation declined by RM129mil or 10% to RM1.1bil.

Petchem closed trading on Thursday up 2 sen to RM5.85.