KUALA LUMPUR, May 20 -- Petronas Chemicals Group Bhd’s (PCG) net profit slipped to RM506 million in the first quarter ended March 31, 2020 (Q1 2020), from RM800 million in Q1 2019.
Revenue also eased to RM3.89 billion from RM4.13 billion previously, it said in a filing with Bursa Malaysia today.
The group attributed its performance to the decline in crude oil price, 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 million, or 13 per cent year-on-year, to RM2.4 billion as a result of lower product prices.
Additionally, revenue from its fertilisers and methanol segment also decreased by RM106 million, or eight per cent, to RM1.3 billion due to a decline in product prices.
Commenting on the results, PCG managing director and chief executive officer Datuk Sazali Hamzah said 2020 started off as an unprecedented year for most industries in the wake of the COVID-19 pandemic, followed by the fallout in the Organisation of the Petroleum Exporting Countries and its allies (OPEC+).
“Nevertheless, the group continued to demonstrate resilience in Q1 2020 by maintaining our operational efficiency, customer centricity and diverse product portfolio.
“In 2020, we will proceed with the commissioning and commercialisation of our chemical plants within the Pengerang Intergrated Complex,” he said in a separate statement, today.
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 for 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 industry benchmark,” it said.
For its olefin and derivatives segment, the group anticipates product prices to marginally recover towards year-end if the COVID-19 pandemic eases and there is improvement in crude oil price.
Meanwhile, PCG forecast fertilisers prices to remain stable as the demand is less impacted by the pandemic.
“It is anticipated to be firm in line with 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.
Malaysia National News Agency
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