Latest news with #PetronasChemicals
Free Malaysia Today
4 days ago
- Business
- Free Malaysia Today
Petronas Chemicals drops 11% after RM1bil loss in Q2
Petronas Chemicals suffered its largest quarterly loss since listing with a RM1.08 billion net loss in Q2 FY2025. (Bernama pic) PETALING JAYA : Petronas Chemicals Group Bhd's (PCG) shares tumbled 11% today after posting its largest quarterly loss since its listing in 2010, at RM1.08 billion for the second quarter ended June 30 (Q2 FY2025). The integrated chemicals producer, which posted a RM777 million net profit a year ago, saw its earnings affected by lower product margins, huge unrealised foreign exchange losses, and asset impairments. The stock fell as much as 44 sen or 11% to RM3.52 in the afternoon session, following the release of its Q2 financial results. It managed to pare its losses to close 36 sen or 9.1% lower at RM3.60, valuing the group at RM28.8 billion. It was the 11th most active stock on Bursa Malaysia with 26.4 million shares traded. Year to date, the stock has fallen nearly 26%. Revenue for Q2 fell 16% year-on-year to RM6.4 billion, impacted by lower sales volumes and product prices, reduced revenue from joint operations and the ringgit's appreciation against the US dollar. For the first six months of FY2025, the Petronas Group's chemical arm posted a cumulative net loss of RM1.1 billion from a net profit of RM1.45 billion in the same period last year. Revenue for the first half fell 7.4% to RM14.09 billion from RM15.23 billion last year. Earnings before interest, tax, depreciation and amortisation (Ebitda) fell 56% to RM395 million, mainly due to weaker product spreads and reduced contribution from Pengerang Petrochemical Company Sdn Bhd (PPCSB). Forex losses widened to RM446 million from RM62 million a year earlier, largely due to the unrealised forex impact from the revaluation of shareholder loans to PPCSB. The group also recognised RM431 million in impairment losses on property, plant and equipment within its specialities segment, primarily at its Swedish unit Perstorp, which it acquired for RM7.31 billion in 2022. PCG's plant utilisation rate dropped to 77% from 94% in the previous quarter, as feedstock supply disruptions and repair and maintenance works impacted production. Among the affected facilities was PC Fertiliser Kedah, which faced feedstock shortages due to the gas pipeline incident at Putra Heights, which was fully resolved as of June 2025. Strategic portfolio review The disappointing results has prompted the group to intensify its business review, cut costs and resize its workforce. In a statement, the company also said it was reassessing investments in joint ventures and associates. Mazuin Ismail. Managing director and CEO Mazuin Ismail said in light of the increasingly dynamic market environment, PCG is undertaking a 'strategic portfolio review across our entire value chain'. 'Although we faced market and operational challenges during the quarter, our financial position remains robust. 'Furthermore, our value creation and cost optimisation initiatives have led to more than RM200 million in improvement in Ebitda on a year-to-date basis. This has enabled us to declare an interim dividend of RM240 million,' he said in a statement. The group declared a first interim dividend of three sen per share, down from 10 sen in the same quarter last year, payable in September.
Malay Mail
6 days ago
- Business
- Malay Mail
Petronas Chemicals shares slip after posting RM1.08b quarterly loss
KUALA LUMPUR, Aug 14 — Petronas Chemicals Group Bhd (PCG) shares were lower following weaker results in the second quarter ended June 30, 2025 (2Q 2025) after reporting a net loss of RM1.08 billion compared with a net profit of RM777 million a year ago. The integrated chemicals producer said the net loss was due to lower earnings before interest, tax, depreciation and amortisation (EBITDA), asset impairment at Perstorp Holding AB, unrealised foreign exchange loss after revaluing shareholders' loan to Pengerang Petrochemical Company Sdn Bhd (PPCSB) and finance expenses from payment adjustments for trade payables at PPCSB. Its revenue fell by 17 per cent to RM6.44 billion from RM7.73 billion previously, mainly due to lower sales volume, the strengthening of the ringgit against the US dollar and lower product prices. At 10.33am, PCG share price eased two sen or 0.28 per cent to RM3.58 with 3.77 million shares traded. The counter opened at RM3.55. In a research note today, CIMB Securities Sdn Bhd said overall results fell short of its consensus expectations, with the key variance stemming from lower-than-expected plant utilisation. 'We have cut our FY 2025, FY 2026, and FY2027 forecast earnings by 11.8 per cent, 9.1 per cent, and 8.1 per cent, respectively, to reflect the weaker-than-expected 2Q 2025 results. 'We maintain our 'Hold' rating while lowering our target price (TP) to RM3.45 per share,' it added. Maybank Investment Bank Bhd said PCG turning in a net loss in 2Q 2025 is pretty much in line with its views in early July 2025. 'We reiterate our bearish view on the olefins and derivatives (O&D) subsector due to the ongoing regional oversupply glut (mainly from China). 'We make no changes to our FY 2025-2027 earnings forecasts and maintained a 'Sell' rating with a TP of RM2.59 per share,' it said. Hong Leong Investment Bank Bhd (HLIB) said PCG will continue to operate under an oversupply environment, with muted downstream demand continuing to put on pressure on ethylene prices. 'We slash our FYs 2025-2027 profit forecasts by -43 per cent/-27 per cent/-20 per cent to factor in a lower plant utilisation and sales volume for the O&D segment. 'We expect it to remain loss-making due to subdued product prices amid persistent regional oversupply, weak downstream demand across key end markets, and sustained margin compression from unfavourable paraxylene-naphtha spreads,' the report said. It has a 'Sell' rating with TP of RM2.18 per share, it said. — Bernama
Malay Mail
6 days ago
- Business
- Malay Mail
Petronas Chemicals posts RM1.08b 2Q loss on weaker sales, asset impairments
KUALA LUMPUR, Aug 13 — Petronas Chemicals Group Bhd (PCG) posted a net loss of RM1.08 billion in the second quarter ended June 30, 2025 (2Q 2025) from a net profit of RM777 million in 2Q 2024. The integrated chemicals producer said the net loss was due to lower earnings before interest, tax, depreciation and amortisation (Ebitda), impairment of assets at Perstorp Holding AB and unrealised foreign exchange loss from revaluation of shareholders' loan to Pengerang Petrochemical Company Sdn Bhd (PPCSB) and finance expenses arising from adjustments of timing of payment for trade payables at PPCSB. Its revenue fell by 17 per cent to RM6.44 billion from RM7.73 billion previously, mainly due to lower sales volumes, the strengthening of the ringgit against the US dollar and lower product prices. PCG recorded a lower plant utilisation rate of 77 per cent compared to 89 per cent in the corresponding quarter due to feedstock supply disruption at PC Fertiliser Kedah as well as higher plant repair and maintenance activities during the quarter, resulting in lower production volume. For the six month period, PCG also recorded a net loss of RM1.10 billion from a net profit of RM1.45 billion year-on-year, while revenue slipped by seven per cent to RM14.09 billion against RM15.23 billion previously. The lower revenue is largely due to foreign currency translation following the strengthening of the ringgit against the US dollar and lower average product prices. Managing director/chief executive officer Mazuin Ismail said the 2Q 2025 presented several operational challenges, both internal and external, that impacted its plants' performance. Internally, he said PCG proactively shut down PC Ethylene for vessel wall rectification without significantly affecting its commitments to customers. 'We also decided to proactively scale back operations at PC Aromatics due to unfavourable economics. 'On the external front, our plant at PC Fertiliser Kedah was affected by the feedstock supply disruption following the gas pipeline incident at Putra Heights. The disruption has been resolved and operation has been fully restored in June 2025,' he said in a statement. Looking ahead, while market conditions remain challenging, we are confident that our strong fundamentals combined with the initiatives currently underway will continue to strengthen our resilience,' Mazuin added. PCG has declared a first interim single-tier dividend of three sen per ordinary share for the financial year of 2025. The dividend amounting to RM240 million is payable on Sept 10, 2025. — Bernama
New Straits Times
6 days ago
- Business
- New Straits Times
Petronas Chemicals posts RM1.08b net loss in Q2 on operational, market challenges
KUALA LUMPUR: Petronas Chemicals Group Bhd posted a weaker earnings in the second quarter of 2025 due to internal and external disruptions to its operations. This comes amid heightened geopolitical tensions in the Middle East and tariff announcements, which affected crude oil prices and weakened the US dollar. The chemicals producer posted a net loss of RM1.08 billion for the quarter ended June 30, 2025, compared with a net profit of RM777 million a year earlier. This was mainly dragged by a 56 per cent drop in lower earnings before interest, tax, depreciation and amortisation (Ebitda) to RM396 million. The loss was also affected by a remeasurement loss from adjustments in the timing of trade payable payments and an impairment of assets at Perstorp. It was further impacted by higher unrealised foreign exchange losses from the revaluation of a shareholder loan to a joint operation, as well as increased depreciation and finance costs from the same entity. The revenue also fell nearly 17 per cent to RM6.4 billion from RM7.7 billion last year due to lower sales volumes and average product prices. Petronas Chemicals declared first interim dividend of three sen amounting to RM240 million that will be paid on Sept 10, 2025. For the first half of 2025, the group revenue declined 7.0 per cent to RM14.1 billion largely on foreign currency translation following the strengthening of the ringgit against the US dollar and lower average product prices. It recorded net loss of RM1 billion on adjustment of timing of payment for trade payables at Pengerang Petrochemical Company Sdn Bhd, impairment of assets at Perstorp, as well as unrealised foreign exchange loss on revaluation of shareholders loan, higher depreciation and finance costs at Pengerang Petrochemical. In a statement, Petronas Chemicals managing director and chief executive officer Mazuin Ismail said the results reflect several operational challenges both internal and external, that impacted the plants' performance. He added that the commodities market remains challenging amid persistent oversupply and ongoing trade as well as geopolitical tensions. "Nevertheless, demand continues to grow, particularly in Asia, driven by population and urban growth. Our Pengerang facility, built to support this growth, is currently operating to meet the creditors reliability test by year-end," he added. Mazuin said that in light of the increasingly dynamic market environment, Petronas Chemicals are undertaking strategic portfolio review across value chain. "While market conditions remain challenging, we are confident that our strong fundamentals combined with the initiatives currently underway will continue to strengthen our resilience," he said.
New Straits Times
09-07-2025
- Business
- New Straits Times
Petronas Chemicals' earnings to stay weak as O&D spreads hit multi-year lows
KUALA LUMPUR: Petronas Chemicals Group Bhd's earnings are expected to remain under pressure in the coming quarters due to prolonged weakness in olefins and derivatives (O&D) spreads. In a research note, Maybank Investment Bank (Maybank IB) said the O&D subsector is still bearish due to the ongoing regional oversupply, mainly from China. It said O&D spreads continued to weaken in the second quarter of 2025, currently at multi-year lows since the Covid-19 pandemic in the first half of 2020. "This is given the ongoing regional supply glut, driven by fierce upcoming regional petrochemical complexes, mainly from China, due to the country's drive for self-sufficiency. "We are closely monitoring industry developments to identify any possible turnaround for the sector, as most naphtha-based petrochemical players are loss-making in the current environment," it said. Maybank IB said the weaker US dollar could result in unrealised foreign exchange (forex) losses, as the ringgit appreciated by five per cent against the greenback to 4.21 as at end-June 2025 from 4.43 at end-March 2025. Based on historical trends, the firm said Petronas Chemicals conducts a mark-to-market assessment and books in the forex impact on their assets on a quarterly basis. It said the company's upcoming second-quarter headline profits could be negatively affected by the revaluation of its shareholder loans to Pengerang Petrochemical Company (PPC), as well as the revaluation of the latter's payables. "Based on our estimates, Petronas Chemicals could register weaker core earnings in the second quarter due to a shutdown in PRefChem and declining O&D spreads," it said. Maybank IB, however, said a potential earnings upside could occur if the company's 50 per cent-owned PPC secures a "special discount" from PRefChem, contingent upon the latter's profitability following recent favourable gross refining margins. This subsidy could help offset PPC's losses and provide some relief to Petronas Chemicals' bottom line in the second half of 2025. Maybank IB kept its "Sell" call on the stock with an unchanged target price of RM2.59 a share.
