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Petronas Chemicals fourth-quarter earnings improve on lower operating expenditure

24 Feb 2021 / 09:30 H.

PETALING JAYA: Petronas Chemicals Group Bhd’s (PetChem) net profit for the fourth quarter ended Dec 31, 2020 rose 37% to RM466 million from RM340 million a year ago in line with higher earnings before interst, tax, depreciation and amortisation (ebitda), following lower operating expenditure.

Revenue was lower by 9.4% at RM3.84 billion versus RM4.23 billion in the same quarter last year largely due to lower sales volume and product prices.

PetChem recorded higher plant utilisation rate of 94% as compared to 89% in the corresponding quarter, mainly due to lower level of maintenance activities resulting in higher production volume. However, sales volume was lower due to inventory build-up for inventory management.

Overall average prices for the group decreased from the corresponding quarter in tandem with declining crude oil price and softer demand following global Covid-19 pandemic.

For the full year period, PetChem’s net profit dropped 42% to RM1.63 billion from RM2.81 billion. while revenue was lower by 12% at RM14.36 billion against RM16.37 billion last year largely due to lower product prices.

PetChem recorded higher plant utilisation rate and production volume mainly due to lower level of plant statutory turnaround activities. However, sales volume was slightly lower as compared with corresponding year.

It paid a first interim single-tier dividend of 5 sen per share, amounting to RM400 million in respect of the financial year ended Dec 31, 2020 to shareholders on Sept 25, 2020.

Looking ahead, the results of the group’s operations are expected to be primarily influenced by global economic conditions, petrochemical products prices which have a high correlation to crude oil prices, particularly for the olefins and derivatives segment, utilisation rate of its production facilities and foreign exchange rate movements.

“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. The group anticipates market recovery will continue providing stable demand for our products,“ PetChem said.

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