Hengyuan falls 10.62% after slump in 1Q earnings

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KUALA LUMPUR (May 22): Hengyuan Refining Co Bhd shares fell 10.62% this morning after its net profit fall 68.94% to RM86.81 million in the first quarter ended March 31, 2018 from RM279.49 million a year ago as margins fell due to a lower crack spread for motor gas.

At 9.13am, Hengyuan lost 88 sen to RM7.41 with 960,400 shares done.

The decline in the crack spread, which measures the pricing difference between a barrel of crude oil and the petroleum products refined from it, occurred amidst increasing crude prices and high inventory in the region, the refiner noted.

As a result, earnings per share declined to 28.94 sen from 93.16 sen previously despite marginally lower manufacturing expenses.

This was despite a 4.41% increase in quarterly revenue to RM3.06 billion from RM2.93 billion previously due to higher average product prices in the quarter, during which Brent crude oil averaged US$76 per barrel versus US$65 per barrel in the previous corresponding quarter.