Petronas Chemical's Q2 earnings double to RM964 million

PETALING JAYA: Petronas Chemicals Group Bhd's (PetChem) net profit for the second quarter ended June 30, 2017 doubled to RM964 million from RM462 million a year ago on the back of higher volumes, stronger US dollar and lower operating expenditure.
Revenue rose by 24% to RM3.96 billion compared with RM3.20 billion in the previous year's corresponding quarter driven by higher sales volume, higher prices and stronger US dollar.
For the six months period, PetChem's net profit also doubled to RM2.26 billion from RM1.05 billion a year ago on higher volumes and improving product spreads. Its revenue rose by 36% to RM8.65 billion compared with RM6.35 billion in the previous year's corresponding period
PetChem said in a filing with the stock exchange that the results of the group's operations are expected to be primarily influenced by global economic conditions, utilisation rate of its production facilities and petrochemical products prices, which have a high correlation to crude oil prices, particularly for the olefins and derivatives segment.
"The utilisation of our production facilities is dependent on plant maintenance activities and sufficient availability of feedstock as well as utilities supply. The group will continue with its operational excellence programme and supplier relationship management to sustain plant utilisation level at above industry benchmark, albeit slightly lower than 2016 due to higher statutory turnarounds planned in the third quarter," PetChem said.

The group anticipates the olefins and derivatives market to firm in the near term, drawing support from tight supply condition from scheduled turnarounds and increased demand from restocking activities.
However, it anticipates an overall bearish undertone for fertilisers as demand slows down amidst a supply glut. Methanol prices are expected to be stable primarily due to healthy downstream demand and cheaper feedstock prices.
PetChem’s share price rose two sen to close at RM7.03 yesterday on some 5.01 million shares done, giving it a market capitalisation of RM56.24 billion.