PETRONAS Chemicals registers improved net profit of RM668mil in 1Q


PETRONAS Chemicals managing director and chief executive officer Mazuin Ismail

KUALA LUMPUR: Petronas Chemicals Group Bhd remains mindful of the ongoing geopolitical tensions that are contributing to volatility in energy and feedstock prices, as well as the uncertain macroeconomic environment, said managing director and CEO Mazuin Ismail.

"In addition, we are mindful of the potential impact of new capacities entering the market, contributing to an oversupply situation that will likely continue to keep pressure on product prices and margins," he added.

On his outlook, Mazuin said produce price movement is expected to be mixed going into the second quarter with some olefins and derivatives (O&D) products such as ethylene and aromatics showing improvement on supply limitation while others are relatively unchanged.

He said urea demand has moderated due to delayed regional planting season caused by the hot weather, while methanol remains weak following muted downstream demand.

"Similarly, we are expecting divergent outlooks for the specialties segment as the construction sector continues to struggle with weak infrastructure growth and high interest rates, while products aimed at the automotive sector may see improved demand," he said in a statement.

During the first quarter ended March 31, 2024 (1QFY24), PETRONAS Chemicals registered a net profit of RM668mil, up from RM532mil in the year-ago quarter, on revenue of RM7.5bil against RM7.56bil in the comparative quarter.

The group's earnings per share rose to eight sen from seven sen in the comparative quarter.

According to the group, earnings before interest, taxation, depreciation and amortisation (Ebitda) surged 77% to RM1.2bil from RM655mil in 4QFY23 due to lower costs of fuel, energy, utilities and maintenance, higher product spreads, higher contribution from Perstorp Group as well as positive foreign exchange impact.

Ebitda margin during the quarter expanded to 16% from 9% in the preceding quarter.

"Our diversified portfolio of products has worked in our favour as improvement in the O&D segment helped counter the decline in average product prices in our fertiliser and methanol (F&M) segment.

"Our specialities segment has significantly improved following higher sales volume and product margins," said Mazuin.

Plant utilisation rate was recorded at 87%, an improvement from 84% during the quarter contributing to marginal increase in production volume.

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