KUALA LUMPUR: Petronas Chemicals Group Bhd’s net profit fell 54 per cent to RM553 million for the third quarter ended September 30, 2019 (Q32019) from RM1.21 billion recorded in the same period last year.
The group, in its filing with Bursa Malaysia today, said revenue fell to RM3.67 billion from RM4.83 billion previously.
This was due to the lower product prices, partially offset by higher sales volume and the weakening of the ringgit against the US dollar.
The lower net profit was partially offset by lower tax expense, Petronas Chemicals said.
“The group recorded plant utilisation of 81 per cent, which had improved from the corresponding quarter of 79 per cent, mainly due to better plant performance. Correspondingly, production and sales volumes increased.
“Overall average product prices for the group decreased from the corresponding quarter in tandem with declining crude oil prices and softer market demand,” it said.
Petronas Chemicals said its operations were expected to be primarily influenced by global economic conditions, foreign exchange rate movements, utilisation rate of its production facilities and petrochemical products prices which have a high correlation to the 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.
The group will continue with its operational excellence programme and supplier relationship management to sustain plant utilisation level at above industry benchmark.
Petronas Chemical managing director and chief executive officer Datuk Sazali Hamzah said the results demonstrated its resilience and continued focus to deliver value through effective turnaround management and high plant reliability resulting in higher utilisation rate for the period, which exceeded world class operating benchmark.
“The petrochemical product prices have stabilised but market outlook remains soft due to lower global GDP growth and expected additional capacities coming onstream, resulting in a long market. However, market fundamentals remain strong in the Asia Pacific region.
“Given our robust business model and competitive position, we will continue sustaining the business and creating value through existing operations while vigorously pursuing our growth agenda,” said Sazali.
Its new plants at the Pengerang Integrated Complex (PIC) are nearing completion and remain on track to commence commercial operations by the end of the year.
“We are now in the process of stabilising the plants to deliver additional capacity of a new product range to meet our customers’ requirements,’ he added.
The group announced its first interim dividend of 11 sen per share for the year, amounting to RM880 million.