KUALA LUMPUR: Petronas Chemicals Group Bhd reported an improved set of financial results in the third quarter ended Sept 30, 2017, underpinned by the fertilisers and methanol segment.
It announced on Thursday its earnings rose 2.4% to RM913mil from RM891mil a year ago. Earnings per share were flat at 11 sen.
Revenue rose at a stronger pace of 12.6% to RM4.01bil from RM3.56bil primarily driven by higher prices and strengthening US dollar as well as higher sales volumes.
It said plant utilisation for the group was at 86% against 100% a year ago mainly due to statutory turnaround activities undertaken during the current quarter.
“Despite lower plant utilisation, production and sales volumes increased against corresponding quarter mainly contributed by SAMUR plant which commenced commercial operation in May 2017,” it said.
Overall average product prices improved in tandem with higher crude oil price.
However, earnings before interest, tax, depreciation and amortisation (Ebitda) dipped 2% to RM1.4billion mainly due to higher operating expenditure relating to activities undertaken during the statutory turnarounds.
Olefins and derivatives
Petronas Chemicals said the segment recorded plant utilisation of 82% as compared to 100% in the corresponding quarter as a result of statutory turnaround activities undertaken at its derivatives plant.
Average product prices continued to strengthen due to the recovery of crude oil prices.
“Despite lower volumes, revenue increased by RM91mil or 4% to RM2.6bill following higher prices coupled with stronger US Dollar.
“Nevertheless, Ebitda decreased to RM852mil by RM210mil or 20% mainly due to higher operating expenditure relating to activities undertaken during the statutory turnaround. Correspondingly, profit after tax was lower by RM94mil or 14% at RM586mil,” it said.
Fertilisers and methanol
It said the segment recorded a lower plant utilisation of 88%, down 96% a year ago mainly due to statutory turnaround activities at its ammonia plant. However, production and sales volumes were higher primarily contributed by SAMUR plant which started commercial operation in May 2017.
Average product prices strengthened as methanol prices improved partially offset by the impact of weakened ammonia prices as a result of oversupply situation.
The segment recorded revenue of RM1.4bil, an increase of RM349mil or 33% on the back of higher prices and volumes, supported by stronger US Dollar. Ebitda improved by 52% to RM600mil and profit after tax by 44% to RM369mil.
Nine months performance
For the nine months ended Sept 30, 2017, it reported that earnings climbed by 63% to RM3.17bil from R$M1.945bil in the previous corresponding period. Its revenue increased by 27.7% to RM12.66bil from RM9.91bil.
On the outlook, Petronas Chemicals expected the olefins and derivatives market to be stable in the near term, drawing support from higher feedstock prices, partially negated by seasonal low demand in China.
It said the fertiliser segment was expected to be firm supported by demand from the agriculture sector and the unavailability of supply from the Middle East.
Methanol prices are expected to stabilise owing to regional supply shortage alongside stable downstream demand.