Petronas Chemicals 1Q net profit falls 25% on-year to RM802m

TheEdge Fri, May 24, 2019 03:35pm - 4 years View Original


KUALA LUMPUR (May 24): Petronas Chemicals Group Bhd announced today a 25% drop in first quarter net profit at RM802 million from RM1.07 billion a year earlier as revenue dropped due to lower product prices and sales volume.

Petronas Chemicals said in a Bursa Malaysia filing today that higher operating expenditure relating to maintenance activities also affected its bottom line. The company said revenue contracted to RM4.13 billion in the first quarter ended March 31, 2019 (1QFY19) from RM4.95 billon. 

"Petronas Chemicals recorded lower plant utilisation of 95% as compared to 100% in the corresponding quarter, mainly due to higher level of maintenance and statutory turnaround activities at its methanol and aromatics plants
respectively. Sales volumes was lower in line with lower production. 

"Overall average prices for the group decreased from the corresponding quarter in tandem with declining crude oil price. Revenue was lower by RM821 million or 17% at RM4.1 billion largely due to lower product prices and sales
volumes, partially offset by the weakening of ringgit against US dollar," Petronas Chemicals said.

According to Petronas Chemicals, earnings before interest, taxes, depreciation, and amortisation (EBITDA) decreased RM578 million or 31% to RM1.3 billion in line with lower revenue and higher operating expenditure relating to maintenance activities. 

"Profit after tax also reduced by RM294 million or 27% to RM813 million following lower EBITDA, partially offset by lower tax expense. In addition, there was an impact of foreign exchange loss on its shareholder loans pursuant to the divestment of 50% equity interest in a subsidiary in the corresponding quarter," Petronas Chemicals said.

Looking ahead, Petronas Chemicals said its operating results are expected to be primarily influenced by global economic conditions, foreign exchange rate movements, utilisation of production facilities, and petrochemical product prices, which have a high correlation to crude oil prices.

"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," Petronas Chemicals said.

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