KUALA LUMPUR (May 27): Petronas Chemicals Group Bhd’s first quarter net profit surged nearly threefold to RM1.46 billion from RM506 million a year earlier as revenue rose on higher petrochemical product prices in tandem with the recovery in crude oil prices despite lingering concerns on the Covid-19 pandemic’s impact on the global economy.

In a filing with Bursa Malaysia today, Petronas Chemicals said revenue rose to RM4.68 billion in the first quarter ended March 31, 2021 (1QFY21) from RM3.89 billion.

Petronas Chemicals, which did not declare any dividend for 1QFY21, said the group "recorded lower plant utilisation rate of 90% as compared to 94% in the (previous) corresponding quarter mainly due to higher level of maintenance and statutory turnaround activities resulting in lower production and sales volumes".

"Profit after tax (before minority interest) was higher by RM973 million at RM1.5 billion in line with higher EBITDA (earnings before interest, taxes, depreciation, and amortisation) and higher net share of profit from joint ventures and associates, partly negated by lower foreign exchange gain on revaluation of shareholder loan to a joint operation company.

"(In quarterly terms) revenue increased by RM839 million or 22% at RM4.7 billion largely attributable to higher product prices. Profit after tax (before minority interest) was higher at RM1.5 billion in line with higher EBITDA and higher net share of profit from joint ventures and associates," Petronas Chemicals said.

Going forward, Petronas Chemicals said the results of the group's operations are expected to be primarily influenced by global economic conditions, prices of petrochemical products such as olefins, which have a high correlation to crude oil prices, utilisation rate of Petronas Chemicals' production facilities and foreign exchange rate movements. 

The Covid-19 pandemic continues to adversely affect the global economy and Petronas Chemicals has not been spared, according to the group.

"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.

"The group anticipates petrochemical product prices to remain strong in the coming quarter, amid continued tight supply and demand recovery," Petronas Chemicals said.

At 2.42pm today, Petronas Chemicals' share price rose 18 sen or 2.25% to RM8.18, which values the group at about RM65.44 billion.

Petronas Chemicals has eight billion issued shares, according to the company's latest quarterly financial report.