Petronas Chemical Q1 earnings at RM1.065b, stronger ringgit weighs

Petronas Chemicals Bhd registered the highest net money inflow of RM9.47mil last week.

KUALA LUMPUR: Petronas Chemicals Group Bhd reported lower earnings of RM1.065bil in the first quarter ended March 31, 2018 due to the strengthening of the ringgit against the US dollar and forex loss on its loans.

It said on Monday the earnings in Q1FY18 fell 17.7% from RM1.295bil a year ago. Its revenue, however, rose 5.4% to RM4.951bil from RM4.695bil a year ago. Earnings per share were 13 sen compared with 16 sen.

Petronas Chemicals achieved plant utilisation of 100%, as 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 Project SAMUR) which started commercial operation in May 2017.

It said overall average product prices strengthened from the corresponding quarter following the increase in crude oil price.

Commenting on its revenue, Petronas Chemical said it increased by RM256mil or 5% to RM5bil primarily driven by higher sales volumes and product prices, partially offset by the strengthening of 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 sales volumes and product prices, they were offset by the strengthening of ringgit against the US dollar and a once-off adjustment relating to 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 lower Ebitda, coupled with the impact of foreign
exchange loss on its shareholder loans pursuant to the divestment of 50% equity interest in a subsidiary,” it said.

Commenting on the olefins and derivatives, Petronas Chemicals said the segment recorded strong plant utilisation at 100% in the current and corresponding quarters. 

“Production and sales volumes remained comparable for both quarters. Average product prices for the segment improved by approximately 10% in tandem with strengthening crude oil prices,” it said.

Petronas Chemicals sais despite higher product prices and comparable sales volumes, revenue dipped 2% to RM3.2bil due to the strengthening of ringgit against dollar by 52 sen or 12%.

However, Ebtida fell 17% at RM1.1 billion and profit after tax fell 23% to RM719mil due to the strengthening of ringgit against the dollar as well as a once-off adjustment relating to under accrual of manpower-related expenses in the previous periods.

As for the fertilisers and methanol, the segment recorded stronger operational performance with plant utilisation of 100% compared to 96% a year ago.

This resulted in higher production and sales volumes. Average product prices across all products strengthened due to higher crude oil prices and limited global supply.

Revenue rose 21% to RM1.8bil, boosted by higher sales volumes and prices, partially offset by the strengthening of ringgit.
 
Ebitda increased by 25% to RM779mil. Profit after tax also rose by 25% to RM564mil.