KUALA LUMPUR (Nov 16): Petronas Chemicals Group Bhd (PetChem) saw its net profit jump 37.7% to RM1.26 billion in the third quarter ended Sept 30, 2018 (3QFY18) from RM913 million a year ago, on higher revenue and supported by lower tax expenses and higher interest income.

This resulted in higher earnings per share of 16 sen for 3QFY18 compared with 11 sen for 3QFY17.

PetChem's quarterly revenue increased 20.4% to RM4.83 billion from RM4.01 billion in 3QFY17 on the back of higher product prices, partially offset by lower sales volumes and the strengthening of the ringgit against the US dollar.

In a filing with Bursa Malaysia today, PetChem said plant utilisation for the group was lower at 79% compared with 86% a year ago, largely due to higher level of statutory turnaround activities at its urea and methanol plants.

Consequently, production and sales volumes were lower.

Overall average product prices for the group strengthened in tandem with higher crude oil price, it added.

For the cumulative nine months period (9MFY18), the group posted a 16.5% increase in net profit to RM3.69 billion from RM3.17 billion a year ago, while revenue rose 14.6% to RM14.51 billion from RM12.67 billion in 9MFY17.

On prospects, PetChem said its operations are 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 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," it added.

PetChem said it anticipates that the olefins and derivatives segment to soften in the coming quarter. This is in view of ample supply from the Middle East and Northeast Asia, while slowing down of demand following regional planned turnarounds.

Nevertheless, it expects the fertiliser and methanol segment to stabilise as supplies resume after turnarounds and healthy demand from further downstream industries.

PetChem shares ended the morning session unchanged at RM9.40, with 1.69 million shares done, bringing a market capitalisation of RM75.2 billion.