Petronas Chemicals Q4 net profit up 40%

PETALING JAYA: Petronas Chemicals Group Bhd posted a 40% jump in net profit for the fourth quarter ended Dec 31, 2016, due to continued focus on improving plant reliability and collaborations to secure higher feedstock supply.
The group recorded a higher plant utilisation of 96%, which surpasses world-class benchmarks, enabling it to increase sales volume to ride the impact of low petrochemical product spreads. Average product prices fell 17% in 2016 compared with 2015.
Petronas Chemicals’ net profit for the final quarter came to RM987 million compared with RM704 million in the previous year’s corresponding quarter. This was on a 14% rise in revenue to RM3.95 billion from RM3.45 billion for the same quarter in the year before.
The board of directors has declared a second interim dividend of 12 sen per ordinary share amounting to RM960 million, payable next month. This is on top of the seven sen dividend paid in September 2016.
For the full year ended Dec 31, 2016, the group’s net profit jumped almost 42% to RM2.93 billion, compared with RM2.78 billion for the same period in 2015. This came on a marginal increase in revenue for the year to RM13.86 billion, from RM13.54 billion.
On the group’s prospects for this year, Petronas Chemicals told Bursa Malaysia that operations are expected to be primarily influenced by global economic conditions, utilisation rate of production facilities and petrochemical product 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,” it said.
The group will also begin operations at its new world-scale fertiliser plant in Sipitang, Sabah, in the first quarter of this year.
In a statement yesterday the group said its projects with BASF through associate company BASF Petronas Chemicals Sdn Bhd at its plant in Gebeng, Pahang, are well within the range of start-up schedule and the production units for the citral, citronellol and l-menthol are to come on-stream in phases in 2017. Work on the production facility for highly reactive polyisobutene is progressing well, and the facility is to be commissioned in 2017, as planned.
The petrochemical projects within the Pengerang Integrated Complex in Johor are progressing as planned, and they include the newly awarded engineering, procurement, construction and commissioning package for the flexi polyethylene project.