This article first appeared in The Edge Financial Daily on February 26, 2019

KUALA LUMPUR: Petronas Chemicals Group Bhd’s (PetChem) net profit for the fourth quarter ended Dec 31, 2018 (4QFY18) rose 27.7% to RM1.29 billion from RM1.01 billion a year earlier, as revenue climbed on stronger sales volumes and a weaker ringgit against the US dollar.

In a Bursa Malaysia filing yesterday, PetChem said revenue for the quarter rose 6.8% to RM5.06 billion from RM4.74 billion previously.

PetChem declared a second interim dividend of 18 sen per share or RM1.44 billion, payable on March 27. In addition to the first interim dividend of 14 sen paid last September, its cumulative dividend for FY18 amounts to 32 sen per share or RM2.56 billion, the company’s highest annual payout.

For the financial year ended Dec 31, 2018 (FY18), PetChem saw a net profit of RM4.98 billion, up 19.1% from RM4.18 billion for FY17, as revenue grew 12.5% to a record high of RM19.58 billion from RM17.41 billion. The top-line rise was driven by higher production and sales volume, coupled with higher average product prices throughout most of the year thanks to buoyant crude oil prices, the group said in a separate statement.

Its earnings before interest, taxes, depreciation and amortisation (Ebitda) and profit after tax (PAT) for the year were also at record highs.

Ebitda grew 5% year-on-year to RM7 billion from RM6.6 billion, on higher sales volume and improved product spreads, while its Ebitda margin stood at 36%. In line with the higher revenue and Ebitda, PAT rose 15% to RM5.1 billion from RM4.4 billion.

PetChem managing director and chief executive officer Datuk Sazali Hamzah said FY18 was “another solid year” for the group “as a result of an effective implementation of our operational and commercial strategies”.

“Our petrochemical plants at the Pengerang Integrated Complex (PIC) are progressing well at 96% project completion and expected to commence commercial operations in the second half of 2019. This additional capacity and a range of new products will complement our ability to serve our customers' diverse requirements as well as our growth,” he added.

Although he acknowledged the prices of petrochemical products are softening, the demand outlook for these products remains strong in the Asia-Pacific. “With our strong operational performance, combined with new product offerings from the PIC, PetChem Group is well-positioned to address the market’s challenges.”