KUALA LUMPUR (Feb 24): Petronas Chemicals Group Bhd (PetChem) closed its financial year ended Dec 31, 2021 (FY21) with a record high annual profit of RM7.35 billion, driven by a surge in petrochemical prices throughout the year and healthy demand, with its fourth quarter (4QFY21) earnings surging over four times to RM2.06 billion — also its highest quarterly net profit on record — from the RM466 million it made in the same quarter in the prior year.

PetChem's annual profit for FY21, which saw petrochemical product prices soaring to historical peaks, driven by higher energy prices, strong demand and tight supply amid global supply disruptions, is also over four times the RM1.63 billion it recorded for FY20.

Twelve-month revenue rose 60.32% to RM23.03 billion from RM14.36 billion previously — with 4QFY21 revenue rising 81.8% to RM6.98 billion from RM3.84 billion — supported by high plant utilisation of 93%, despite several statutory turnaround and maintenance activities undertaken during the year, the group noted in a statement.

It declared a second interim dividend of 23 sen per share that amounts to RM1.8 billion, payable on March 25, compared to seven sen in 4QFY20. The latest dividend will bring PetChem's total dividend for FY21 to 56 sen, almost five times the 12 sen it paid for FY20.

Improved product spreads from higher prices lifted FY21 earnings before interest, taxes, depreciation and amortisation margin for FY21 to 36% from 25% in FY20, it noted.

PetChem managing director cum chief executive officer Mohd Yusri Mohamed Yusof said the group's stellar FY21 performance is also attributed to operational and commercial excellence initiatives undertaken by the team.

"We are pleased with the exceptional results given the challenges we faced and continue to navigate. These challenges include global supply chain constraints, price shocks, effects of climate change and Covid-19-related restrictions, which are still relevant factors to consider in 2022," he added.

“We are off to a good start this year," he added.

On the immediate-term market outlook, he said product prices are anticipated to remain firm, supported by high crude oil and natural gas prices, amid ongoing geopolitical tensions and Opec+'s lagging production increase.

"We anticipate market correction to gradually occur once demand is balanced with supply from new capacities in the Asia-Pacific region, scheduled to come onstream in 2022.”

On the longer-term growth front, he noted that the group recently announced the building of a melamine plant in Gurun, Kedah. "This plant is targeted to come onstream in 2024, in line with our strategy to add value to our existing molecules," he added.

"As we pursue our growth agenda, we reinforced our commitments to create positive impacts on economic, environmental and social aspects.

“We have completed our net zero carbon emissions roadmap which sets our carbon reduction goals and pathways, starting with a reduction of 20% by 2030 towards becoming net-zero by 2050,” he concluded.

PetChem’s shares slipped four sen or 0.43% to RM9.19 at the time of writing, giving the group a market capitalisation of RM73.52 billion.