PETALING JAYA: Petronas Chemicals Group Bhd (PetChem) reported a 22.3% decline in net profit to RM1.12 billion for the second quarter ended June 30, 2019 against RM1.44 billion recorded in the same period last year due to lower sales revenue and higher tax expense.
In a filing with Bursa Malaysia, the group said overall average products prices fell during the quarter in tandem with declining crude oil prices and softer market demand.
Average product prices for the olefins and derivatives segment declined as crude oil prices decreased, coupled with softer market demand. The drop in crude oil prices also led to lower average product prices for the fertilisers and methanol segment.
During the quarter, the group recorded a revenue of RM4.33 billion, an 8.3% decrease from RM4.73 billion recorded in the same quarter of the previous year, due to lower product prices partially offset by higher sales volume and the weakening of the ringgit against the US dollar.
For the first six month of the year, PetChem registered a net profit of RM1.92 billion, a 25.4% drop from RM2.57 billion recorded in the corresponding period of last year. Revenue fell 12.5% to RM8.46 billion from RM9.68 billion a year ago.
The group declared an interim dividend of 11 sen per share for the financial year ending Dec 31, 2019, to be paid on Sept 13, 2019. The entitlement date is Aug 28, 2019.
The group said that its operations are expected to be primarily influenced by global economic conditions, foreign exchange rate movements, utilisation rate of its production facilities and petrochemical products prices which have a high correlation to crude oil price, particularly for the olefins and derivatives segment.
Moving forward, the group expects the product prices for its olefins and derivatives segment to stabilise in the coming quarter along with its product prices in the fertilisers and methanol segment.
