KUALA LUMPUR (May 30): Hengyuan Refining Co Bhd’s net profit surged 191% to RM47.46 million for the first quarter ended March 31, 2022 (1QFY22), from RM16.31 million last year, as its quarterly revenue jumped more than two-fold.
Lower net foreign exchange loss and lower manufacturing expenses also contributed to the improved quarterly net profit.
The increase in revenue for the quarter to RM4.95 billion, up 125.36% from RM2.2 billion a year prior, was in line with higher market product price and stronger local demand, Hengyuan said in its quarterly results filing. Earnings per share leapt to 15.82 sen from 5.44 sen. No dividend was declared by the group, which is principally engaged in the business of refining and manufacturing of petroleum products products in Malaysia
“The market price during [1QFY22] surged to an average of US$115 per barrel, as compared to the average price of US$66 per barrel in the corresponding quarter in 2021 (1QFY21).
“1QFY22 recorded a sales volume of 10.6 million barrels compared to 1QFY21 with 8.1 million barrels sold. These resulted in higher revenue at [near] RM5 billion in 1QFY22,” the group said.
On its prospects in coming quarters, Hengyuan said it is cautiously optimistic on the overall market outlook and will closely monitor current market conditions and respond accordingly to mitigate any undesirable impact on its performance.
“The supply and demand disparities amid geopolitical instability and [the] Covid-19 situation in China are causing uncertainty over the global economic outlook. Coupled with the ongoing Russia-Ukraine war and economic sanctions on Russia, the global oil market remains challenging. On the local front, demand is expected to improve, as Malaysia is transitioning into [the] endemic phase,” it said.
Meanwhile, Hengyuan said it will continue to focus on operational efficiency, product quality, hydrocarbon hedging and financial risk management to optimise its performance. It will also remain vigilant over the Covid-19 risks by maintaining rigorous safety management measures.
Shares in Hengyuan finished 38 sen or 6.01% higher at RM6.70 on Monday (May 30), giving the group a market capitalisation of RM2.01 billion.