Petronas Chemicals reports RM18 million net loss in Q1 as forex weighs
KUALA LUMPUR: Petronas Chemicals Group Bhd reported a net loss of RM18 million in the first quarter ended March 31, 2025 (Q1'25) due to unrealised foreign exchange losses, unfavourable net foreign exchange impact from the specialities segment, among others, despite recording a higher revenue of RM7.66 billion.
The group achieved a profit of RM668 million and a revenue of RM7.50 billion in Q1'24.
In a Bursa Malaysia filing yesterday, Petronas Chemicals said the quarter's higher revenue was mainly due to higher sales volume, partially offset by the strengthening of the ringgit against the US dollar.
It said the reduction in net profit was mainly due to unrealised foreign exchange loss on revaluation of a shareholders loan to a joint operation entity, lower finance income arising from adjustment of timing for payment of trade payables in the preceding quarter and unfavourable net foreign exchange impact from the specialities segment.
A higher plant utilisation rate of 94% was recorded compared to 87% in the previous corresponding quarter due to improved plant performance as well as lower statutory plant turnaround and maintenance activities, mainly from fertilisers and methanol segment, resulting in higher production.
On prospects, the group said the results of its operations were primarily influenced by global economic conditions and petrochemical product prices, which have a high correlation to crude oil price, particularly for the olefins and derivatives (O&D) segment, utilisation rate of its production facilities and foreign exchange rate movements.
The utilisation of production facilities is dependent on plant maintenance activities and sufficient availability of feedstock as well as utilities supply, Petronas Chemicals said
'The group will continue with its operational excellence programme and supplier relationship management to sustain plant utilisation level at above industry benchmark,' it said.
Petronas Chemicals anticipates product prices for O&D will be impacted by the implications of the United States (US) tariffs, additional supply from new capacities and weak downstream demand.
'Fertiliser product prices are forecasted to be firm with limited supply from the Middle East amidst seasonal demand from India, Southeast Asia and Australia.
'However, ammonia and methanol product prices are forecasted to be soft due to ample supply and persistent weak demand from industrial and gasoline blending sectors,' it added.
For specialties, Petronas Chemicals said the group remains cautious in navigating the challenging market conditions, as we anticipate demand uncertainty to persist across most of our end markets.
Commenting on the Q1'25 performance, its managing director and CEO, Mazuin Ismail, said the group's resilience in navigating the challenging market landscape underscores the strength of its diversified portfolio.
'The improvement in earnings before interest, taxes, depreciation, and amortisation reflects our ongoing efforts on operational excellence with commendable plant utilisation rate achieved by our commodities business, despite setbacks in January 2025 that temporarily impacted operations at several plants in Kertih, Kemaman District, Terengganu,' he said.
Meanwhile, regarding the implications of US tariffs, Mazuin said Petronas Chemicals is closely monitoring these developments and assessing broader implications on the overall market dynamics.
He added that the group remains focused on driving excellence to maintain its resilience and competitiveness amid the current industry downturn.
'Our unwavering commitment to safe and efficient operations across all facilities continues as we are currently undertaking repair and maintenance activities at several O&D and F&M plants,' he said.
Mazuin said Petronas Chemicals is also strengthening customer relationships to better meet their evolving needs while upholding strict financial discipline and prudent capital spending. – Bernama
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