Higher EBITDA props up Petchem's 4Q net profit, declares 15 sen dividend

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KUALA LUMPUR (Feb 20): Petronas Chemicals Group Bhd (Petchem)’s net profit climbed 1.82% year-on-year (y-o-y) to RM1.01 billion in its fourth financial quarter from RM987 million, on higher earnings before interest, tax, depreciation and amortisation (EBITDA).

EBITDA for the period ended Dec 31, 2017 (4QFY17) rose RM243 million or 16% at RM1.7 billion, Petchem said in a filing with Bursa Malaysia today, adding profit after tax improved in line with higher EBITDA.

However, it was partially offset by higher tax expense arising from recognition of deferred tax liabilities and higher depreciation at its Sabah Ammonia and Urea (SAMUR) plant.

Earnings per share stood at 13 sen compared with 12 sen in 4QFY16, while quarterly revenue climbed 20.09% to RM4.74 billion from RM3.95 billion a year ago, because of strengthening prices, supported by higher sales volume, partially offset by a weakening US dollar.

Petchem said its plant utilisation was at 93%, slightly lower than 96% in the corresponding quarter, following higher levels of statutory turnaround and maintenance activities undertaken in 4QFY17.

Nevertheless, it achieved more production and sales volumes, mainly contributed by SAMUR, which started commercial operations in May 2017.

Overall average product prices improved in line with firmer crude oil price.

Petchem declared a second interim single tier dividend of 15 sen for the financial year ended Dec 31, 2017 (FY17) amounting to RM1.2 billion, bringing the full year dividend payout to 27 sen, compared with 19 sen in FY16.

The dividend will be paid on March 21. The ex-date is March 5 and entitlement date March 7.

For FY17, net profit expanded by 42% to RM4.18 billion or 52 sen per share versus RM2.93 billion or 37 sen per share in FY16, on the back of RM17.41 billion revenue, which grew 25.59% from RM13.86 billion last year.

Going forward, Petchem said its operations would be primarily influenced by global economic conditions, the rate of utilisation of its production facilities and petrochemical products prices that have a high correlation to crude oil prices, particularly for the olefins and derivatives segment. 

“The utilisation of our production facilities is dependent on plant maintenance activities and sufficient availability of feedstock and utilities supply. The group will continue with its operational excellence programme and supplier relationship management to sustain plant utilisation level at above industry benchmark,” the filing added.

At 12.30pm, the stock went up four sen or 0.49% to RM8.14 with 7.82 million shares done, for a market capitalisation of RM65.12 billion.