KUALA LUMPUR: Petronas Chemical Group Bhd registered a higher net profit of RM668 million in the first quarter (Q1) ended March 31, 2024 from RM532 million a year ago on the back of improved sales volume and product margins.
However, the group's revenue fell to RM7.50 billion in Q1 2024 from RM7.51 billion last year.
In a statement today, Petronas Chemical said the chemicals sector saw average prices of selected products increase in Q1 2024 against last quarter, Q4 2023 due to seasonal demand recovery amidst the current industry downcycle.
The group attributed the improvement in profitability to lower operating costs, higher ethylene and
aromatic spreads and better performance from its specialties segment.
Commenting on the results, Petronas Chemical managing director and chief executive officer Mazuin Ismail said the group has progressed from last quarter having stabilised its plant utilisation rates and production volume.
Mazuin said the group's diversified portfolio of products has worked in its favour as improvement in the olefins &dDerivatives (O&D) segment helped counter the decline in average product prices in its fertiliser & methanol (F&M) segment.
"Our specialties segment has significantly improved following higher sales volume and product margins.
"Our immediate attention is focused on ensuring our production capacities across all segments are optimised and run smoothly," he said.
On the market outlook Mazuin said the group anticipates movement in product prices to be mixed moving into the second quarter with some O&D products such as ethylene and aromatics showing improvement on supply limitation while others are relatively unchanged.
He said urea demand has moderated due to delayed regional planting season caused by the hot weather, while methanol remains weak following muted downstream demand.
"Similarly, we are expecting divergent outlooks for the specialties segment as the construction sector continues
to struggle with weak infrastructure growth and high interest rates, while products aimed at the automotive sector may see improved demand.
"We remain cautious of the ongoing geopolitical tensions that are contributing to the volatility in energy and feedstock prices as well as the uncertain macroeconomic environment," he added.