Kuala Lumpur: Petronas Chemicals Group Bhd (PCG) reported a net loss of RM18 million in the first quarter ended March 31, 2025, due to unrealised foreign exchange losses and an unfavourable net foreign exchange impact from the specialities segment, despite recording a higher revenue of RM7.66 billion.
According to BERNAMA News Agency, the group had achieved a profit of RM668 million and a revenue of RM7.50 billion in the same period of the previous year, 1Q 2024. In a filing with Bursa Malaysia, Petronas Chemicals explained that the higher revenue in the current quarter was primarily due to increased sales volume, though partially offset by the strengthening of the ringgit against the US dollar.
The reduction in net profit was mainly attributed to unrealised foreign exchange loss on the revaluation of a shareholders loan to a joint operation entity and lower finance income resulting from the adjustment of timing for payment of trade payables in the preceding quarter. Additionally, there was an unfavourable net foreign exchange impact from the specialities segment.
Petronas Chemicals noted a higher plant utilisation rate of 94 percent compared to 87 percent in the previous corresponding quarter, owing to improved plant performance and reduced statutory plant turnaround and maintenance activities, particularly from the fertilisers and methanol segment, leading to increased production.
On future prospects, the group stated that its operations are primarily influenced by global economic conditions and petrochemical product prices, which have a high correlation to crude oil prices, especially for the olefins and derivatives segment. The utilisation rate of production facilities and foreign exchange rate movements also play a significant role. The group will continue its operational excellence programme and supplier relationship management to sustain plant utilisation levels above industry benchmarks.
Petronas Chemicals anticipates that product prices for olefins and derivatives will be affected by US tariffs, additional supply from new capacities, and weak downstream demand. Fertiliser product prices are expected to remain firm due to limited supply from the Middle East and seasonal demand from India, Southeast Asia, and Australia. However, ammonia and methanol product prices are forecasted to be soft because of ample supply and weak demand from industrial and gasoline blending sectors.
For the specialities segment, Petronas Chemicals remains cautious in navigating challenging market conditions, with demand uncertainty expected to persist across most end markets. Commenting on the 1Q 2025 performance, Managing Director and CEO Mazuin Ismail highlighted the group’s resilience in navigating the challenging market landscape, underscoring the strength of its diversified portfolio.
Mazuin noted that the improvement in earnings before interest, taxes, depreciation, and amortisation (EBITDA) reflects ongoing efforts in operational excellence, with a commendable plant utilisation rate achieved by the commodities business, despite setbacks in January 2025 that temporarily impacted operations at several plants in Kertih, Kemaman District, Terengganu.
Regarding the implications of US tariffs, Mazuin stated that Petronas Chemicals is closely monitoring these developments and assessing broader implications on overall market dynamics. The group remains focused on driving excellence to maintain resilience and competitiveness amid the current industry downturn. Mazuin also emphasized the group’s commitment to safe and efficient operations across all facilities as they undertake repair and maintenance activities at several olefins and derivatives and fertilisers and methanol plants. Petronas Chemicals is also strengthening customer relationships to better meet their evolving needs while maintaining strict financial discipline and prudent capital spending.