PetChem 1Q earnings down 19.2%

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KUALA LUMPUR: Petronas Chemicals Group Bhd’s (PetChem) net profit slipped 19.2% to RM605 million or eight sen per share for the first quarter ended March 2015 (1QFY15) from RM749 million or nine sen a share a year ago, on lower revenue due to lower average realised product prices.

Revenue for 1QFY15 fell 17.5% to RM3.14 billion from RM3.81 billion in 1QFY14.

In a filing with Bursa Malaysia, PetChem (fundamental: 2.7; valuation: 1.1) attributed the lower revenue to the lower average realised product prices, which offset higher sales volumes and favourable exchange rate movement.

PetChem said although the group recorded significantly higher plant utilisation at 90% in 1QFY15 compared with 80% in 1QFY14, market conditions continued to be challenging as both its olefins and derivatives, and fertilisers and methanol segments recorded lower average realised product prices amid a lower crude oil price environment.

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

PetChem shares closed 0.34% higher at RM5.85 yesterday, with a market capitalisation of RM46.63 billion. 


This article first appeared in The Edge Financial Daily, on May 8, 2015.