PetChem 2Q net profit down 22% on lower revenue and higher tax expense, declares 11 sen dividend

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KUALA LUMPUR (Aug 13): Petronas Chemicals Group Bhd's (PetChem) net profit for the second quarter ended June 30, 2019 fell 22.3% year-on-year to RM1.12 billion from RM1.44 billion, due mainly to lower revenue and higher tax expense.

In a filing to the stock exchange today, PetChem said revenue for the quarter fell 8.4% to RM4.34 billion from RM4.73 billion previously, due to lower product prices, partially offset by higher sales volume and the weakening of ringgit against US dollar.

Earnings per share slipped to 14 sen from 18 sen previously.

PetChem declared an interim dividend of 11 sen per share to be paid on Sept 13.

For the six months ended June 30, PetChem's net profit fell to RM1.92 billion from RM2.58 billion in the same period a year ago, while revenue declined to RM8.47 billion versus RM9.68 billion in the previous year.

On its 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 said.

At the midday break today, PetChem fell 3.52% or 26 sen to RM7.13 for a market capitalisation of RM57.04 billion.