Kuala Lumpur, 31 May 2021– PETRONAS Chemicals Group Berhad (PCG) recorded a jump in profit after tax to RM1.5 billion in the first quarter of 2021 (1Q 2021), triple the Group’s earnings in 1Q 2020 and 4Q 2020. The substantially strong performance is largely attributed to improvements in both crude oil and petrochemicals prices boosted by global demand recovery and supply disruptions.
Key highlights 1Q 2021 vs 1Q 2020
- Revenue increased 20% to 7 billion on the back of significant increase in average product prices, underpinned by high demand and tight supply environment.
- The resulting higher product spreads lifted Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA) margin to 36% (1Q 2020: 20%).
- EBITDA increased to 7 billion (1Q 2020: RM764 million) in line with improved margin. Profit after Tax (PAT) tripled to RM1.5 billion (1Q 2020: RM493 million).
- Operations remained strong during 1Q 2021 with sales volume comparable to 1Q 2020 and plant utilisation rate of 90% (1Q 2020: 94%) due to heavy plant maintenance and statutory turnaround
Commenting on the results, Managing Director/Chief Executive Officer, Datuk Sazali Hamzah said, “We are pleased to deliver an impressive set of results for 1Q 2021, marking a stark contrast to 2020 for the petrochemical industry. In addition to improved crude oil price, average product prices moved upward, higher than expected, by 20% to 30% due to tight supply of products stemming from the US winter storms in February. This resulted in improved margin across all our product segments, including those of our joint ventures and associate companies.”
On PCG’s outlook, Datuk Sazali said “While the market is still bullish, product prices have begun to moderate as demand normalises. Given the healthy demand for our products, we are optimistic for a better performance in 2021. However, given the resurgence of COVID-19, we will remain vigilant of changes in the market.”
A key focus for PCG in 2021 is to maintain operational efficiency, as several of the Group’s production plants across Malaysia are scheduled for major statutory maintenance and turnaround this year. With the successful completion of the statutory turnarounds in Methyl Tertiary Butyl Ether / Propane Dehydrogenation (MTBE/PDH) plant in Kuantan and Methanol Plant 1 in Labuan in May, the Group will endeavour for the remaining turnarounds to be conducted successfully within the second half of the year. On the market front, “we are better prepared for changes in the market given our experience managing global supply disruptions last year,” Datuk Sazali said.
Commenting on the Group’s growth strategy, Datuk Sazali said that pursuing investments in both basic and specialty chemicals will continue to be our priority despite market challenges. On the progress of Pengerang Integrated Complex (PIC), “We are gearing for full start-up in the second half of 2021,” he concluded.
