PETALING JAYA: Petronas Chemicals Group Bhd
(PetChem) has staged an encouraging bounce back to the black in the first quarter ended March (1Q26) after a tumultuous 2025, even as the company continues to foresee a volatile operating environment for the rest of year.
It said ongoing geopolitical tensions, supply chain disruptions, and uneven demand conditions across key markets would remain as key themes moving forward, with managing director Mazuin Ismail pointing out that the conflict in West Asia has reshaped PetChem’s operating landscape “with remarkable speed”, raising complexity and volatility.
Despite revenue having softened by 8.4% year-on-year to RM7.02bil for 1Q26, the company sprung back to profitability by posting a bottom line of RM401mil, as opposed to a loss of RM18mil in the same period last year.
In a filing with Bursa Malaysia, PetChem reported that plant utilisation rate was higher during the quarter at 97%, against 94% in 1Q25, due to better plant performance resulting in higher production and sales volumes.
It attributed the decline in revenue primarily to the strengthening of the ringgit against the US dollar, as well as to lower revenue contribution from its joint operation entity and specialties segment, although these were partially offset by higher contribution from its fertilisers and methanol segment.
“Ebitda (earnings before interest, tax, depreciation and amortisation) was higher by RM283mil or 32% at RM1.2bil mainly contributed by higher product spreads, higher contribution from specialties segment and lower plant operation costs, partially offset by lower contribution from joint operation entity,” said PetChem.
In addition, it said favourable foreign exchange movements from its specialties segment and gain on disposal of investments also helped its 1Q26 profits.
Offering a more detailed segmental look into its performance, PetChem said its fertilisers and methanol segment saw a higher plant utilisation rate of 103% as compared to 98% in 1Q25, mainly due to better plant performance resulting in higher production and sales volumes.
Revenue for the segment was higher by RM151mil or 6% at RM2.6bil, primarily driven by higher sales volume and average product prices, which in turn were partially offset by strengthening of the ringgit against the greenback.
“Ebitda was higher by RM196mil or 22% at RM1.1bil mainly due to higher average product spreads, partially offset by higher plant operation costs,” it said.
For its specialties business, PetChem said the segment’s revenue was lower by RM227mil or 14% at RM1.4bil, mainly due to a lower sales volume.
Despite the softer top line, the segment’s Ebitda improved to RM198mil, an increase of RM146mil, mainly attributable to other income arising from the sale of emission rights and lower operating costs.
“The segment recorded profit after tax of RM121mil, improved by RM263mil, in line with higher Ebitda, favourable foreign exchange movements and gain on disposal of investment in a subsidiary,” said PetChem.
On the other hand, its olefins and derivatives (O&D) division saw a fall in revenue of 16% to RM2.9bil, largely due to lower income contribution from a joint operation entity, the strengthening of ringgit and lower average product prices, which were partially offset by higher sales volume.
The segment recorded negative Ebitda of RM91mil mainly due to lower contribution from a joint operation entity and lower average product spreads, partially offset by lower plant operation costs.
PetChem said the division recorded a final loss after tax of RM401mil, primarily due to the negative Ebitda.
Compared to the preceding quarter ended December 31, which saw the company posting a marginally smaller revenue of RM6.6bil and a net loss of RM754mil, PetChem pointed to higher average product prices, higher revenue contribution from its Specialties segment and its joint operation entity for the improved quarter-on-quarter showing.
“Ebitda was higher by RM1.1bil at RM1.2bil, mainly due to higher average product spreads, lower plant operation costs and higher contribution from the specialties segment,” it said, before adding that a lower unrealised foreign exchange loss on the revaluation of shareholders loan to a joint operation entity, and a gain on disposal of investments were also contributing factors.
Mazuin, also PetChem chief executive, said the US-Iran conflict underscored the vulnerability of the industry supply chain, given the region’s strategic importance to global feedstock and chemical supply.
“Our integrated model secures a reliable, domestically sourced feedstock for our gas-based operations in Malaysia through an extensive pipeline network, helping to cushion the impact of disruptions in global supply.
“The improvement in Ebitda reflects the underlying strength and resilience of our business model, together with our sustained emphasis on operational and commercial excellence, supported by disciplined cost management,” he observed.
Particularly for its O&D segment, Petchem expects prices to moderate on affordability constraints, affecting demand from downstream manufacturers.
It said its fertilisers business will continue to be supported by global food security priorities and export restrictions in key producing regions, while Methanol supply is set to tighten on scheduled regional plant turnarounds.
“In the specialties segment, we remain cautious given the subdued construction and automotive end markets, while demand for consumer goods is showing modest growth,” said PetChem.
