Latest news with #RM14.1bil
The Star
3 days ago
- Business
- The Star
PetChem sees loss widening on several ops factors
PETALING JAYA: Petronas Chemicals Group Bhd (PetChem) believes that its operating performance will continue to be significantly influenced by global economic conditions and petrochemical products prices, which have a high correlation to crude oil price, particularly for its olefins and derivatives segment. In addition, it said foreign exchange movements and the utilisation rate of its production facilities, which is dependent on plant maintenance activities and utilities supply, also play a factor. PetChem said it will continue with its operational excellence programme and supplier relationship management to sustain plant utilisation level at above the industry benchmark. Releasing its results for the second quarter ended June 30 (2Q25) yesterday, the group suffered a severe downturn in performance, recording a net loss of RM1.08bil, compared to a net profit of RM777mil seen in 2Q24. Revenue for 2Q25 also edged lower by 16.7% year-on-year (y-o-y) to RM6.44bil. Cumulatively for the six months ended June (1H25), PetChem saw earnings dip into the red with a net loss of RM1.1bil, compared to the RM1.45bil net profit it charted in 1H24, as turnover declined 7.4% y-o-y to RM14.1bil. Summarily, the group attributed the weaker 2Q25 performance to lower product spreads and smaller contribution from a joint operation entity due to higher unrealised foreign exchange loss on revaluation of payables, which affected earnings before interest, taxes, depreciation and amortisation (Ebitda), although this was partially offset by lower plant operation costs. Furthermore, the group said lower product prices, weaker sales volume plus strengthening of the ringgit against the US dollar, as well as remeasurement loss arising from timing adjustment for payment of trade payables, impairment of assets at Perstorp Sdn Bhd, higher unrealised foreign exchange loss on revaluation of shareholders loan to a joint operation entity and higher depreciation and finance costs from a joint operation entity, also affected revenue and profits both for 2Q25 and 1H25. For context, Perstorp is a wholly-owned subsidiary of PetChem that specialises in the producing and supplying of waste handling systems. Compared with 1Q25, revenue was lower by 15.9% from RM7.66bil, while net loss widened considerably from a loss of RM18mil. Chief executive and managing director at PetChem Mazuin Ismail commented that 2Q25 had presented several operational challenges both internal and external, that impacted PetChem's plants' performance. 'Notably, internally, we proactively shut down PC Ethylene Sdn Bhd for vessel wall rectification without significantly affecting our commitments to customers. 'We also made the decision to proactively scale back operations at PC Aromatics Sdn Bhd due to unfavourable economics,' he said. On the external front, he said the group's plant at PC Fertiliser Kedah Sdn Bhd was affected by the feedstock supply disruption following the gas pipeline incident at Putra Heights on April 1, before pointing out that the disruption has been resolved, and operation has been fully restored in June. Addressing growth, Mazuin said: '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.' Commenting on strategy, he said in light of the increasingly dynamic market environment, PetChem is undertaking strategic portfolio review across its entire value chain. Anticipating further increase in operating costs and substantial capital requirements, the group recorded an impairment loss on assets at Perstorp. Mazuin noted: '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 RM200mil improvement in Ebitda on a year-to-date basis. 'This has enabled us to declare an interim dividend of RM240mil, which underscores our ongoing commitment to our shareholders in delivering sustainable long-term value.' Looking ahead, while market conditions remain challenging, he said PetChem remains confident that its strong fundamentals, combined with the initiatives currently underway will continue to strengthen its resilience.
The Star
5 days ago
- Business
- The Star
Foreign investors still show interest in Penang
Chow says Penang is committed to developing its integrated circuit design ecosystem. PENANG continues to get foreign investment interest despite uncertainties caused by the 19% tariff on Malaysia's exports to the United States, says Chief Minister Chow Kon Yeow. He said investors from countries like the US, China and Singapore have shown interest in Penang. 'InvestPenang has been busy managing enquiries from foreign investors looking to set up plants here. 'I attended a coordination meeting on a big investment and even though this is still at the initial stage, all relevant agencies are working towards securing this investment,' he said in a press conference at his office. Chow said despite the uncertainties, Penang remained committed to developing its integrated circuit (IC) design ecosystem through initiatives such as Silicon Design @5km, the IC Design Park and the Penang Chip Design Academy. 'The 19% tariff on Malaysian exports to the US, matches rates imposed on other Asean countries. 'This places Malaysia back on a level playing field in the region.' When asked about investment and job opportunities in Penang in the past five years, Chow said between 2020 and the first quarter of 2025, the state recorded RM191.4bil in approved manufacturing investments. 'There have been 79,498 jobs created during that period. 'The annual breakdown for the investments are RM14.1bil in 2020, RM76.2bil (2021), RM13.7bil (2022), RM63.4bil (2023), RM17.3bil (2024) and RM6.7bil in the first quarter of 2025,' he said. On reports that the US may impose a 100% tariff on imported semiconductor chips, Chow said no official decision has been made. 'We will have to wait for the official announcement. 'Such speculation prolongs uncertainty and affects decision-making by multinationals.' Prior to Aug 8, he said semiconductor exports from Malaysia to the US were exempt from the 19% tariff. He urged the Investment, Trade and Industry Ministry to continue engaging with the US to maintain the exemption. On Aug 6, US President Donald Trump reportedly said the US would impose a tariff of about 100% on imported semiconductor chips and that the new tariff rate would apply to 'all chips and semiconductors coming into the US'. However, Trump said the tariff would not apply to companies that had already committed to manufacturing in the US or were in the process of doing so.
