KUALA LUMPUR, Nov 18 — Petronas Chemicals Group Bhd’s (PChem) net profit for the third quarter ended September 30, 2020 (Q3 2020) fell to RM471.0 million from RM553.0 million registered in the same quarter last year.
Revenue slipped six per cent to RM3.46 billion from RM3.67 billion previously, largely due to lower product prices.
In a filing with Bursa Malaysia today, PChem said the overall average prices for the group decreased from the previous corresponding quarter, which is in tandem with declining crude oil price arising from the Opec+ fallout and softer demand following the Covid-19 pandemic.
However, it said the group recorded higher plant utilisation of 90 per cent compared with 81 per cent in the corresponding quarter last year, mainly due to lower level of statutory turnaround activities, and correspondingly, production and sales volumes increased.
For the nine-month period, PChem registered a net profit of RM1.16 billion on the back of strong operational performance amid post-lockdown recovery.
Rebounding from historical lows in Q2 2020, it said petrochemicals product prices were sequentially lifted by an upturn in global manufacturing and subsequent improvement in crude oil prices, easing pressure on profit margins.
In a separate statement, managing director/chief executive officer Datuk Sazali Hamzah said PChem recorded a stronger performance in Q3 2020 from continued focus on operational and commercial excellence, hence ensuring the chemical producer’s readiness to capture market recovery.
“Combined with our strong presence in key regional markets and close collaboration with customers, we are well-positioned to reap the benefits arising from regional economies reopening and resumption of manufacturing activities.
“These factors, together with stabilised crude oil prices, led to demand recovery and improvement in petrochemical prices,” he said.
Notwithstanding the favourable market improvements in Q3 2020, the group maintains its cautiously optimistic view that a more meaningful and gradual recovery will occur in 2021.
“While the prices of petrochemicals are expected to be in line with the recovery momentum, recent reintroductions of Covid-19 containment measures may have a dampening effect on the market recovery.
“To mitigate potential headwinds and ensure resilience, PChem will continue to focus on operational efficiency, commercial excellence and maintain strict financial discipline,” said Sazali.
On the company’s growth plans, he said the Pengerang Integrated Complex, scheduled for start-up in Q1 2021, will increase the group’s petrochemical production capacity by about 15 per cent to 14.6 million tonnes per annum.
He said despite the challenging business environment, the group would continue to pursue its investments in downstream value chains and speciality chemicals such as butadiene derivatives, ethoxylates, polyether polyols and silicone derivatives.
“We expect to continue investing in innovative and high-value speciality chemicals to complement the expansion of our core business. This future-proofing strategy will further strengthen PChem’s resilience,” he added. — Bernama
