KUALA LUMPUR: Petronas Chemical Group Bhd’s (PCG) net profit slipped to RM506 mil in the first quarter ended March 31, from RM800 mil in 1Q19.
Revenue also eased, to RM3.89 bil from RM4.13 bil previously, it said in a filing with Bursa Malaysia today.
The group attributed its performance to the decline in crude oil prices, softer demand following the Covid-19 pandemic as well as lower product prices.
It said that revenue from its olefins and derivatives segment during the quarter declined by RM351 mil or 13% year-on-year to RM2.4 bil as a result of lower product prices.
Additionally, revenue from its fertilisers and methanol segment also decreased, by RM106 million or 8% to RM1.3 bil due to a decline in product prices.
On prospects, PCG said the group’s results are expected to be primarily influenced by global economic conditions, foreign exchange rate movements, utilisation rate of production facilities, as well as petrochemical products’ prices which have a high correlation to crude oil price, particularly in the olefins and derivatives segment.
“The utilisation of our production facilities is dependent on plant maintenance activities, 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 the industry benchmark,” it added.
For its olefin and derivatives segment, the group anticipates product prices to marginally recover towards year-end if the pandemic eases and there is an improvement in crude oil price.
Meanwhile, PCG forecast fertiliser prices to remain stable as demand is less impacted by the pandemic.
“It is anticipated to be firm in line with the upcoming planting season and stable thereafter. Methanol demand is projected to improve gradually with crude oil price recovery and improvement in downstream derivatives demand,” it said. – May 20, 2020, Bernama
