KUALA LUMPUR: Petronas Chemicals Group Bhd's (PetChem) net profit increased 0.5 per cent to RM1.87 billion in the second quarter ended June 30 from RM1.86 billion recorded in the same quarter a year ago.
This was despite lower production and sales volume recorded during the quarter, PetChem said today.
The company's revenue in Q2 increased 17.4 per cent to RM6.58 billion from RM5.61 billion, lifted mainly by increased product prices on the back of high crude oil and natural gas prices.
PetChem said between March and June 2022, Brent crude oil price was at a 10-year historical high as the Russia-Ukraine crisis escalated.
Plant utilisation rate, however, declined following major scheduled plant turnaround and maintenance activities.
Managing director and chief executive officer Mohd Yusri Mohamed Yusof said since the Russia-Ukraine war started in March, product prices remained relatively robust in Q2 2022 due to high prices of crude oil and natural gas.
"This helped cushion the impact of lower production and sales volume for us as we undertook scheduled plant turnaround activities in our fertiliser plant in Sipitang, Sabah and methanol plant in Labuan.
"These activities are regulatory and necessary to ensure the long-term safety, reliability and efficiency of our facilities.
"As we have completed all plant turnarounds activities in the first half (1H) 2022, we expect our plant utilisation rates to be above 90 per cent in 2H 2022," he said in a statement today.
For the six-month period, PetChem's net profit increased 18.8 per cent to RM3.95 billion from RM3.32 billion, while revenue increased 28.5 per cent to RM13.22 billion from RM10.28 billion.
On market outlook, Yusri said while product prices continue to be driven by the high energy prices, rising feedstock and operational costs coupled with China lockdowns had weakened demand, particularly for downstream chemical products.
"The prices of olefins and derivatives are expected to stabilise with demand recovery following the easing of restrictions in China, ahead of year-end re-stocking activities," he said.
Yusri added that the commissioning activities at the Pengerang Integrated Complex had progressed since May and the start-up of the petrochemical facilities had commenced in phases since July.
"On other growth projects, the construction of our nitrile butadiene latex plant in Pengerang and the specialty ethoxylates and polyols in Kerteh are also progressing well, ahead of schedule operation date in 2H 2023," he said.
On the proposed acquisition of Perstorp Holdings AB, Yusri said the company expected to complete the transaction in early Q4 2022.
Perstorp was a strategic fit in PetChems sustainable growth strategy towards realising its expansion and decarbonisation goals, he added.
"As a growth platform in our specialty chemicals portfolio, Perstorp will enhance PCG's long-term performance and value"We believe the acquisition will future proof our business against market cyclicality and volatility as well as to progress in a transformational shift towards a net-zero carbon emission future," he said.