PETRONAS Chemicals Group Berhad (PCG) has reported a net profit after tax (PAT) of RM809 million for the second quarter of the financial year ending December 31, 2024. During this period, revenue increased by 3% compared to Q1 2024, reaching RM7.7 billion. This growth was driven by higher sales in the Fertilizer & Methanol segment and greater contributions from the Specialty Chemicals segment.
The petrochemical sector continues to face challenges such as global oversupply, slow growth rates, geopolitical instability, and uncertain macroeconomic conditions. Specific olefin product prices remain high due to temporary supply shortages caused by logistical disruptions and plant maintenance closures in the Asia-Pacific region. Meanwhile, the availability of supplies has affected the prices of urea, propylene, and monoethylene glycol. Margin pressures from high energy, raw material, and operational costs continue to challenge downstream manufacturers.
For the first half of FY2024, cumulative revenue increased by 4% year-on-year to RM15.2 billion, supported by higher contributions from the Specialty Chemicals segment and positive foreign exchange impacts. EBITDA rose 6% year-on-year to RM2.3 billion, and PAT increased by 29% compared to 1H 2023, reaching RM1.5 billion. PCG has declared an interim dividend of RM800 million, representing 55% of PAT and non-controlling interests for 1H 2024.
Key Highlights for 2Q 2024 Compared to 1Q 2024:
- Revenue grew by 3% to RM7.7 billion (1Q 2024: RM7.5 billion) due to higher sales volumes.
- EBITDA decreased by 4% to RM1.1 billion (1Q 2024: RM1.2 billion) due to increased operational costs from joint ventures. EBITDA margin declined to 14% (1Q 2024: 16%).
- PAT increased by 15% to RM809 million (1Q 2024: RM703 million), mainly due to other income related to receivables revaluation, partially offset by unrealized foreign exchange losses on shareholder loans to a joint venture.
- An interim dividend of 10 sen per share has been declared for the financial year ending December 31, 2024, totaling RM800 million, to be paid in September 2024.
- Plant utilization increased to 89% (1Q 2024: 87%), contributing to a marginal rise in production volumes.
Mazuin Ismail, Managing Director/CEO of PCG, commented, “The business landscape is increasingly complex, with the chemical industry facing prolonged uncertainties, excess capacity, and low demand. PCG remains committed to executing our business excellence initiatives to maintain efficiency and profitability, while ensuring our future sustainability strategies, including decarbonization plans, stay on track.”
He added, “In the second half of 2024, we have scheduled several plant recovery and maintenance activities, with an immediate focus on executing these safely. We also look forward to the commercial operations of our joint venture plant, PCG PCC Oxyalkylates in Kertih, Terengganu.”
Looking ahead, PCG anticipates a slower performance in the Olefins & Derivatives segment due to supply alignment following regional closures, with downstream demand remaining weak. Urea is expected to strengthen due to increased agricultural applications, while methanol supply availability will continue to impact prices.
The Specialty Chemicals segment is expected to experience limited recovery in the second half of the year amid ongoing global market uncertainty, geopolitical tensions, and a slow recovery in market demand. Challenges are expected to persist in the development and construction sectors, while the automotive sector shows signs of flat demand for the second half of 2024, despite some growth in consumer goods.
