This article first appeared in The Edge Financial Daily on August 14, 2019

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

Revenue for the quarter fell 8.4% to RM4.34 billion from RM4.73 billion previously due to lower product prices, though they were partially offset by higher sales volume and the ringgit’s weakening against the US dollar, PetChem said in a statement yesterday.

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, 2019, PetChem’s net profit fell 25.6% y-o-y to RM1.92 billion from RM2.58 billion, while revenue declined to RM8.47 billion from RM9.68 billion.

On prospects, PetChem said its operations are expected to be influenced primarily by global economic conditions, foreign exchange rate movements, utilisation rates of its production facilities and petrochemical product prices, which have a high correlation with crude oil prices, particularly 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 [its] plant utilisation level at above [the] industry benchmark,” it said.

PetChem shares fell 2.03% or 15 sen to close at RM7.24 yesterday, giving it a market capitalisation of RM57.92 billion. In the past one year, the stock has retreated over 17%.