Profit statements

Q2 Malaysia PCG Net Profit Increases 0.5%; warns of falling demand

SINGAPORE (ICIS) – PETRONAS Chemicals Group (PCG) on Monday reported a marginal year-on-year increase in its second-quarter net profit on the back of higher product prices, but the Malaysian producer warned of weaker demand in the second half of 2022.

Malaysian Ringgit ($M) m

Q2 2022

Q2 2021

% change

H1 2022

H1 2021

% change

Revenue

6,583

5,608

17.4%

13,217

10,283

28.5%

Operating result

1,876

1,816

3.3%

3,974

3,259

21.9%

net profit

1,869

1,860

0.5%

3,945

3,321

18.8%

Product prices in the second quarter were driven higher by higher crude oil and natural gas prices following the Russia-Ukraine crisis, the company said in a statement.

The company’s plant utilization rate in April-June 2002, however, fell to 72% from 97% in the same period of 2021 due to major planned plant shutdowns at its plant fertilizer plant in Sipitang, Sabah and its methanol plant in Labuan.

PCG’s plant utilization rate is expected to be above 90 percent in the second half of this year, said PCG Managing Director and CEO Mohd Yusri Mohamed Yusof.

“While commodity prices continue to be driven by high energy prices, we are seeing rising feedstocks and operating costs, coupled with lockdowns in China, have weakened demand, particular for downstream chemicals,” he said.

“Olefins and derivatives prices are expected to stabilize as demand recovers following the easing of restrictions in China, ahead of year-end replenishment activities,” Mohd Yusri said.

PCG’s commissioning activities at the Pengerang Integrated Complex (PIC) in southern Malaysia have “progressed since May and start-up of the petrochemical facilities has started in phases since July”, he said.

The company’s plants at PIC – under the Pengerang Refining and Petrochemical (PRefChem) joint venture with Saudi Aramco – include a 350,000 ton/y linear low-density polyethylene (LLDPE) unit, which is also capable of produce grades of metallocene LLDPE (MLLDPE); a 400,000 ton/year high density PE (HDPE) plant; and a 900,000 ton/year polypropylene (PP) unit.

The site also houses an ethylene glycol plant, which will be able to produce 800,000 tons/year of monoethylene glycol (MEG), as well as a 250,000 tons/year isononanol unit (INA).

“The construction of our nitrile butadiene latex plant in Pengerang and specialty ethoxylates and polyols in Kerteh is also progressing well, ahead of the planned second-half 2023 operating date,” said Mohd Yusri.

PCG’s proposed acquisition of Sweden’s Perstorp is expected to close in early Q4 2022, he said.

Focus article by Nurluqman Suratman

($1 = $4.48 million)

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