KUALA LUMPUR, Aug 24 (Bernama) -- PETRONAS Chemicals Group Berhad (PCG) registered another strong quarterly revenue and profits for 2Q 2022. Revenue grew 17% year-on-year, lifted mainly by increased product prices on the back of high crude oil and natural gas prices. Between March and June 2022, Brent crude oil price was at 10-year historical high as the Russia-Ukraine crisis escalated. Plant utilisation rate, however, declined following major scheduled plant turnaround and maintenance activities. Despite lower production and sales volume, PCG posted strong Profit After Tax (PAT) of RM1.9 billion.
 
On a cumulative basis, the Group’s 1H 2022 Revenue and PAT, increased by 29% and 19%, to RM13.2 billion and RM3.9 billion respectively, against the same period last year. PCG also announced an interim dividend payout of RM2.0 billion representing 51% of 1H 2022 PAT. 

Key highlights 2Q 2022 vs 2Q 2021
 
· Revenue rose 17% to RM6.6 billion (2Q 2021: RM5.6 billion) due to higher product prices, driven mainly by higher crude oil and natural gas prices following the Russia-Ukraine crisis.
· Profit after Tax (PAT) was comparable at RM1.9 billion (2Q 2020: RM1.9 billion) as wider product spreads and unrealised foreign exchange gains offset the decline in production and sales volumes. 
· Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA) and EBITDA margin declined to RM2.0 billion and 30% respectively (2Q 2020: RM2.2 billion and 38%) as higher product prices and spreads cushioned the temporary decline in production and sales volumes.
· An interim dividend of 25 sen per share, was declared for the financial year ending 31 December 2022. The dividend amounting to RM2.0 billion, is the highest dividend payout to date and is payable in September 2022.
· Plant utilisation rate declined to 72% (2Q 2021: 97%) due to significantly higher statutory plant turnaround and maintenance activities undertaken during the quarter, resulting in lower production and volume.

Managing Director/Chief Executive Officer, Ir Mohd Yusri Mohamed Yusof commented, “Since the Russia-Ukraine war started in March, product prices remained relatively robust in 2Q 2022 due to high prices of crude oil and natural gas. This helped cushion the impact of lower production and sales volume for PCG as we undertook scheduled plant turnaround activities in our fertiliser plant in Sipitang, Sabah and methanol plant in Labuan. These activities are regulatory and necessary to ensure the long-term safety, reliability and efficiency of our facilities. As we have completed all plant turnarounds activities in 1H 2022, we expect our plant utilisation rates to be above 90% in 2H 2022”.
 
Commenting on the market outlook for 2H 2022, he said “Although product prices continue to be driven by the high energy prices, we observe the rising feedstock and operational costs coupled with China lockdowns have weakened demand, particularly for downstream chemical products. The prices of olefins & derivatives are expected to stabilise with demand recovery following the easing of restrictions in China, ahead of year end re-stocking activities. Urea prices have seen some correction but are likely to remain high compared to historical price levels”. 
 
Updating on the Group’s growth projects, Yusri said “The commissioning activities at the Pengerang Integrated Complex have progressed since May and the start-up of the petrochemical facilities have commenced in phases since July. On other growth projects, the construction of our nitrile butadiene latex plant in Pengerang and the specialty ethoxylates & polyols in Kerteh are also progressing well, ahead of schedule operation date in 2H 2023”. 
 
On the proposed acquisition of Perstorp Holdings AB (Perstorp), Yusri stated that the Group expects to complete the transaction in early 4Q 2022. Perstorp is a strategic fit in PCG’s sustainable growth strategy towards realising its expansion and decarbonisation goals. “As a growth platform in our specialty chemicals portfolio, Perstorp will enhance PCG’s long-term performance and value. We believe the acquisition will future proof our business against market cyclicality and volatility as well as to progress in a transformational shift towards a net-zero carbon emission future,” he concluded. 

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