KUALA LUMPUR (Aug 7): Petronas Chemicals Group Bhd (PetChem)’s net profit for the second quarter ended June 30, 2015 (2QFY15) rose a marginal 0.4% to RM557 million or 7 sen a share, on better earnings due to lower feedstock cost, coupled with favourable exchange rate movements.

In the same period last year, it reported a net profit of RM555 million, also 7 sen a share, its filing to Bursa Malaysia today showed.

Its revenue for the quarter inched down 1.2% to RM3.3 billion from RM3.34 billion, comparable to last year, on higher sales volumes and favourable exchange rate movement which offset the impact of lower average product prices.

The chemical products manufacturer has declared an interim single tier dividend of eight sen for FY15 — same as last year — amounting to RM640 million, payable on Sept 9.

Meanwhile, PetChem said its earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose by RM127 million or 13% to RM1.1 billion in the latest quarter.

Despite higher volumes, its cumulative six months period (1HFY15)’s net profit declined 10.8% to RM1.16 billion or 15 sen per share from RM1.3 billion or 16 sen in 1HFY14, due to narrower product spreads and lower share of profit of equity-accounted joint ventures and associates.

In addition, the group recognised a one-off charge of RM63 million in the current period for change in functional currency at one of its subsidiaries.

“Excluding this, EBITDA is comparable at RM2.2 billion,” it said.

Revenue for the period also retreated 9.8% to RM6.44 billion from RM7.14 billion a year earlier, weighed by lower average product prices, in tandem with falling crude oil and naphtha prices even though production and sales volumes were higher.

It achieved an improved plant utilisation rate of 84% in 1HFY15 compared with 78% a year ago, driven by stronger plant reliability and lower level of statutory turnarounds.

Going forward, PetChem said its operations are expected to be primarily influenced by fluctuations in international petrochemical products prices, global economic conditions and utilisation rate of its production facilities.

“The utilisation of our production facilities is dependent on plant maintenance activities and sufficient availability of feedstock as well as utilities supply,” it added.

With improved plant maintenance programme and supplier relationship management, PetChem aims to achieve better plant utilisation for the year.

As at 2.34pm, PetChem (fundamental: 1.65; valuation: 1.1) was trading at RM6.35, up six sen or 0.95%, with 658,100 shares done, for a market capitalisation of RM50.72 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)