Petronas Chemical Group released its third quarter results, recording a higher plant utilisation rate of 92% as compared to 77% in the corresponding quarter which is said was mainly due to lower plant maintenance activities during the quarter resulting in higher production and sales volumes.
Revenue was higher by RM1.2 billion or 18% at RM8 billion mainly due to higher sales volume and product prices as
well as higher revenue contribution from a joint operation entity. However, EBITDA was lower by RM446 million or 45% at RM554 million which PCG said mainly was contributed by unrealised foreign exchange loss on revaluation of payables in a joint operation entity.
The Group recorded loss after tax of RM762 million as compared to profit after tax in the corresponding quarter of RM439 million in line with its lower EBITDA and also noted on the higher unrealised foreign exchange loss on revaluation of shareholders loan to a joint operation entity.
The LAT was mainly driven by unrealised forex loss on the revaluation of payables at Pengerang Petrochemical Company Sdn. Bhd. (PPC) and the revaluation of shareholders loan to PPC. During the quarter, US Dollar weakened against Ringgit Malaysia
from 4.721 on 30 June 2024 to 4.107 on 30 September 2024. Excluding the impact of forex loss, the Group Profit After Tax (PAT) is estimated at RM352 million.
PPC is a 50:50 joint-venture company between PCG and Saudi Aramco located within the Pengerang Integrated Complex (PIC) in Johor. The complex consists of 4 polymers and a glycols plant with a total design capacity of 3.0 million metric tonnes per annum. The facilities completed the performance test runs in 3Q 2024 ahead of its commercial operation targeted by the end of 2024. PPC is a USD functional currency company and the recent weakening of USD against RM resulted in unrealised forex loss on revaluation of payables of RM536 million, recorded in PCG. Additionally, PCG provided a USD denominated shareholders loan to PPC which was also exposed to unrealised forex loss of RM492 million due to the unfavorable forex movement. Including forex losses from other operations of RM86 million, total forex loss in 3Q 2024 is RM1.1 billion.
Adjusted EBITDA (excluding foreign exchange impact) was higher by RM109 million or 11% at RM1.1 billion (2023: RM995 million) mainly due to higher sales volume and higher spreads, partially offset by higher plant operation costs. Adjusted profit after tax (excluding foreign exchange impact) was higher by RM24 million or 7% at RM352 million (2023: RM328 million) in line with higher adjusted EBITDA.
Commenting on the results, the group said were primarily influenced by global economic conditions, petrochemical products prices which have a high correlation to crude oil price, particularly for the Olefins and Derivatives segment, utilisation rate of our production facilities and foreign exchange rate movements.
The utilisation of its production facilities is dependent on plant maintenance activities and sufficient availability of feedstock as well as utilities supply.
The Group anticipates product prices for olefins and derivatives to be soft due to weak seasonal downstream demand and ample supply amidst upcoming new capacity in Northeast Asia. Fertiliser and methanol product prices are forecasted to be stable as key suppliers are focusing on term commitments, while downstream demand remains subdued. For specialties, the Group sees signs of gradual recovery in specific end markets, but remains cautious given the uncertain macroeconomic environment that may delay near-term recovery.
