PETRONAS Chemicals Group Berhad (PCG) posted 17% year-on-year lower revenue of RM4.1 billion in its first quarter 2019 in tandem with the overall decline in petrochemical product prices. The petrochemical sector slowed during the quarter on market uncertainties as well as lower crude oil prices and demand.
Operations remain steady as PCG achieved plant utilisation of 95%, albeit lower compared to 100% in 1Q 2018 as the Group commenced the first statutory plant turnaround in 2019 as well as maintenance activities undertaken during the quarter. As a result, the Group saw lower production volume and lower sales volume accordingly.
Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) decreased 31% year-on-year to RM1.3 billion from RM1.8 billion on lower spreads and sales volume. Profit After Tax (PAT) declined 27% year-on-year to RM813 million. EBITDA margin for the quarter declined by 6.6% to 31%.
Commenting on the performance, Managing Director/Chief Executive Officer, Datuk Sazali Hamzah said, “While the market remains competitive, we expect the demand for petrochemical products to grow in tandem with stable GDP growth within Asia Pacific region. Our immediate focus is to optimise production, manage costs and ensure timely project delivery.”
Speaking on the progress of PCG’s growth projects, “The new plants at the Pengerang Integrated Complex (PIC) are at 98.3% completion as of April 2019. We remain on track to commence commercial operations in the fourth quarter of the year,” he said.
PCG recently acquired Da Vinci Group B.V., a Netherlands-based company with global operations involving own-brand reselling, formulating and manufacturing of silicones, lube oil additives and chemicals. This represents PCG’s first foray into specialty chemicals via inorganic growth.
The acquisition will indeed accelerate the realisation of PCG’s vision to diversify into differentiated and specialty chemicals.