Petronas Chemicals Group Bhd (PetChem) reported that earnings for its first quarter of the fiscal year 2020 fell 36.9% year-on-year to MYR506 million ($116.35 million). Meanwhile, revenue dropped 5.8% compared to a year earlier to MYR38.9 billion ($8.94 billion). The company attributed the decline to low product prices and weak demand amid the coronavirus pandemic.
Overall plant utilization rate in the quarter was 94%, falling slightly from 95% in the same quarter last year. PetChem’s olefins and derivatives segment posted a 12.8 year-on-year decline in revenue to MYR 2.4 billion ($552 million) in the first quarter. Meanwhile, the segment’s plant utilization rate reached 100%, similar to the corresponding quarter in 2019.
Meanwhile, PetChem’s fertilizers and methanol segment registered a lower plant utilization rate of 90%, compared to 92% a year earlier. The lower utilization rate was attributed to turnaround activities at several plants. Revenue and earnings for the segments fell by 7.8% and 6% year-on-year, respectively, during the quarter.
Following the results, MIDF Amanah Investment Bank Bhd (MIDF Research) downgraded PetChem’s recommendation from buy to neutral. Despite the downgrade, MIDF said it had positive bias to PetChem thanks to the company’s fundamentals and the expected recovery in product prices.
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Published on May 22, 2020 5:44 PM (GMT+8)Last Updated on September 7, 2020 5:11 PM (GMT+8)
