PETRONAS Chemicals managing director and chief executive officer Mazuin Ismail
KUALA LUMPUR: Petronas Chemicals Group Bhd
is contending with a more complex business landscape and heightened volatility in the chemicals industry marked by a long period of overcapacity and low demand.
Over the next few months, the petrochemicals group expects the olefins and derivatives segment will soften as supply returns following the end of regional shutdowns while downstream demand remains weak.
It said in its outlook that urea is forecast to firm up as the agricultural application picks up while supply availability continues to weigh on methanol.
The specialities segment, meanwhile, is expected to see limited recovery in the second half of the year as the global market conditions remain uncertain with ongoing political tension and continued slow recovery in market demand.
"Headwinds are expected to persist in the building and construction sector, while the automotive sector shows indications of flattish demand in 2H24, despite selective improvement in the consumer goods sector," said managing director and CEO Mazuin Ismail in his comments accompanying the group's latest results filing with Bursa Malaysia.
In the second quarter ended June 30, 2024, PETRONAS Chemicals registered a net profit of RM777mil, an improvement from RM628mil in the same quarter a year earlier.
The group reported higher revenue of RM7.73bil, up from RM7.11bil in 2QFY23, while earnings per share rose to 10 sen from eight sen in the comparative quarter.
During the quarter, the plant utilisation rate improved to 89% from 87% in the previous quarter due to a marginal increase in production volume.
For the first half of the year, the group's cumulative net profit was RM1.45bil, as compared to RM1.16bil in 1HFY23, on the back of revenue of RM15.23bil against RM14.67bil in the year-ago period.
The board of directors announced a first interim dividend of 10 sen per share, representing a payout of RM800mil or 55% of 1H24 profit after tax and non-controlling interests.
Mazuin said, moving forward, the group is steadfast in executing business excellence intiatives to maintain efficiency and profitability while ensuring its future-proofing strategies, including decarbonisation, remain on track.
He added that the group has planned a few plant turnaround and maintenance activities in the second half of the year, and is prioritising their safe execution.
"Further to that, we are also looking forward to the commercial operations of our joint venture plant, PSG PCC Oxyalkylates in Kerteh, Terrenganu," he added.
