Kuala Lumpur, 25 Aug 2021 – PETRONAS Chemicals Group Berhad (PCG) delivered strong quarterly revenue and profits for 2Q 2021. Its performance was boosted by significant jump in petrochemical product prices fuelled by rising crude oil prices and strong rebound in global demand.
The Group’s Profit After Tax (PAT) of RM1.9 billion is largely contributed by improvement in product margins despite operating in a very challenging environment arising from COVID-19 resurgence and supply chain disruptions. On a cumulative basis, PAT increased to RM3.3 billion in 1H 2021 against RM678 million in the same period last year.
PCG also announced an interim dividend payout of RM 1.84 billion representing 55% of 1H 2021 PAT.
Key highlights 2Q 2021 vs 2Q 2020
- Revenue grew 77% to 6 billion (2Q 2020: RM3.2 billion) attributed mainly to significant increase in product prices arising from improved global demand and tight supply environment.
- Profit after Tax (PAT) increased to 9 billion (2Q 2020: RM185 million).
- Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA) improved to RM2.1 billion (2Q 2020: RM695 million) lifted by higher product prices and spreads. EBITDA margin rose to 38% (2Q 2020: 22%).
- An interim dividend of 23 sen per share, was declared for the financial year ending 31 December 2021. The dividend amounting to RM 1.84 billion, is payable in September 2021.
- Strong operations maintained in 2Q 2021, with sales volume at 2.1 million mt and plant utilisation rate of 97%.
Managing Director/Chief Executive Officer, Datuk Sazali Hamzah commented, “Rising crude oil prices in 2Q 2021, combined with the rebound in petrochemicals demand, had strengthened product prices and improved profit margins. Compared to the previous year, prices of polymers and urea increased by about 70% and 60% respectively, while ammonia and methanol prices had doubled.”
Commenting on the Group’s highest quarterly earnings, he said “I am pleased with our results considering the increasingly challenging working environment caused by the COVID-19 global pandemic. Our business model, which is based on operational and commercial excellence, ensured we are able to secure market opportunities while navigating global supply chain disruptions. For instance, we were able to optimise production to meet customer orders even during major plant maintenance and statutory turnaround.”
On PCG’s outlook for the rest of 2021, Datuk Sazali said “We expect the price growth to be moderate in 2H 2021. Given the 1H 2021 achievement, an overall improvement in our performance this year looks promising. Furthermore, we will continue with our initiatives, including cost optimisation measures, in order to maximise our financial performance in the current industry uptrend.”
Datuk Sazali went on to explain that the Group’s profit will mainly come from PCG’s existing production capacity. “The new capacities, mainly the petrochemical facilities within the Pengerang Integrated Complex, are not expected to make material contribution to our bottom line this year. Our plan is to progress towards a safe and successful start-up of the integrated complex towards the end of the year,” he concluded.