PETRONAS Chemicals expects challenges to continue in 2024

KUALA LUMPUR: Petronas Chemicals Group Bhd is expecting the challenges seen in 2023 to continue into 2024 with economic recovery being sluggish albeit with pockets of opportunities in various sectors.

"The chemicals industry is cyclical in nature, we therefore expect the current downcycle will turn as the demand catches up with supply.

"We have successfully resolved most of our operational challenges and are strategically positioning ourselves to seize opportunities as the market rebounds," said managing director and CEO Mazuin Ismail in a statement.

He added that ethylene prices should see some support later in the year as consumption improves and drives the demand for polyethylene in packaging applications.

Meanwhile, on the F&M side, urea prices are expected to be stable, supported by planting season in India and the continued ban of urea exports from China, while methanol and speciality chemicals prices may ease as downstream demand is expected to remain soft.

In the fourth quarter ended Dec 31, 2023, PETRONAS Chemicals recorded a net profit of RM112mil, which was a quarter of net profit of RM481mil in 4QFY23, while revenue fell to RM7.21bil from RM8.7bil in the year-ago quarter.

The group's earning per share shrank to one sen from six sen in the previous corresponding quarter.

The board of directors declared a second interim dividend of five sen per share, which brought the annual payout to 13 sen per share or 61.3% of profit after tax and non-controlling interests.

Over the four quarters, PETRONAS Chemicals' net profit contracted to RM1.7bil from RM6.32bil in FY23 while revenue was slightly lower at RM28.67bilin FY24 from RM28.95bil in the previous year.

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