PETALING JAYA: Petronas Chemicals Group Bhd’s (PetChem) net profit slump 54.1% to RM553 million for the third quarter ended September 30, 2019 against RM1.21 billion in the previous corresponding period, largely due to compressed margin.
Revenue for the quarter under review fell 24% to RM3.67 billion from RM4.83 billion, on the back of lower product prices, partially offset by higher sales volume and the weakening of ringgit against US dollar.
In a filing with the stock exchange, PetChem said it recorded a plant utilisation rate of 81%, better than the 79% in the same quarter a year ago
“Correspondingly, production and sales volumes increased. Overall average products prices for the group decreased from the corresponding quarter in tandem with declining crude oil price and softer market demand.”
Profit after tax for the olefins and derivatives segment plunged 70% to RM232 million, while the fertilisers and methanol segment contracted 26% to RM315 million.
PetChem’s nine-month net profit also declined 34.6% to RM2.47 billion from RM3.78 billion, while revenue went down 16.4% to RM12.14 billion from RM14.51 billion.
Looking ahead, PetChem said the group’s operations are expected to be primarily influenced by global economic conditions, foreign exchange rate movements, utilisation rate of production facilities and petrochemical products prices which have a high correlation to crude oil price, 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.”
It expects product prices for the olefins and derivatives segment to stabilise in the coming quarter in view of supply limitation following planned regional turnarounds.
For the fertilisers and methanol segment, product prices are also expected to stabilise due to limited supply amidst soft demand from the end products.
At the noon break, PetChem’s share price fell 5 sen to RM7.75 on 1.83 million shares done.
