Media Release

19 · Aug · 2020
PCG Mitigates COVID-19 Impact, Posts 1H Profit of RM678 Million
  • Plant Utilisation at 97%
  • EBITDA Margin at 21%
  • Interim Dividend of RM400 million

 

Kuala Lumpur, 19 Aug– PETRONAS Chemicals Group Berhad (PCG) maintained profitability in 1H 2020 despite global challenges brought on by COVID-19 and the OPEC+ fallout. The Group registered 6-months Profit after Tax (PAT) of RM678 million, during the period which saw lockdowns across the world and collapse of crude oil prices.
 
PCG’s agility in responding to the current environment due to the pandemic has enabled the Company to sustain strong operational performance in 1H 2020, achieving plant utilisation rate and sales volume at levels comparable to 1H 2019. The depressed petrochemical product prices and prolonged industry downcycle, aggravated by uncertain economic outlook, however, imposed pressure on profit margin.
 
 
Key highlights YTD 1H 2020 vs YTD 1H 2019
  • Operations remained strong during 1H 2020, as the Group registered high plant utilisation rate of 97%, comparable to 1H 2019.
  • Revenue declined 17% year-on-year to RM7.1 billion largely as a result of lower product prices, driven by soft demand and high supply of petrochemicals, along with sharply weaker crude oil prices.
  • Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA) margin declined to 21% from 33% in 1H 2019 due to lower product spreads and compressed margin.
  • EBITDA and PAT stood at RM1.5 billion and RM678 million, lower by 48% and 65% year-on-year respectively.
  • An interim dividend of 5 sen per share, was declared for the financial year ending 31 December 2020. Payable in September 2020, the dividend amounts to RM400 million.
 

Managing Director/Chief Executive Officer, Datuk Sazali Hamzah commented, “Overall, we delivered a resilient performance despite operating in an extremely challenging environment. The domino effect of COVID-19 brought down petrochemical prices to historical lows, particularly in April and May. We mitigated the impact by focusing on operational efficiency and capitalising on our strong market presence in this region. Coupled with our close collaboration with customers, we were able to maximise production to meet sales and delivery commitments with minimal disruption even during these tough times.”

 

“We are cautiously optimistic as the market is showing signs of improvement with the reopening of economies, but a meaningful recovery is only expected to occur gradually towards end 2020 into 2021. In PCG, we are committed towards enhancing our operational and commercial capabilities, and strongly focusing on our cost reduction efforts, towards softening the impact of persistent low product prices. Our team continues to be vigilant of potential risks or disruptions and simultaneously responsive to market changes,” he added.

 

Despite current challenges, PCG is forging ahead with its expansion plans. Commenting on the Group’s growth projects, “Pengerang Integrated Complex (PIC) is gearing for start-up in the first quarter of next year”.

 

“We are embarking on two specialty chemicals projects, namely a butadiene derivative plant in PIC and specialty chemicals plant in Kertih Integrated Petrochemical Complex which are currently undergoing engineering, procurement, construction and commissioning (EPCC) stages. In addition, we are building a silicone blending plant in Gebeng, as part of the growth plans for the Da Vinci Group, the recently acquired subsidiary. This will allow PCG to capture the rising demand for silicone-based products within this region.”

 

“As part of our sustainability agenda, we are building a pilot plant to convert second generation palm biomass into chemicals. We are confident that our future-proofing strategy to sustainably expand our core business as well as to develop the specialty segment, will further strengthen PCG’s resilience,” he concluded.

 
 

Further details on PCG can be found at www.petronaschemicals.com.my

 

For more information, please contact:

 

Yogeswari Thangavelu
Media Relations, Corporate Affairs & Administration Department
PETRONAS CHEMICALS GROUP BERHAD (PCG)
T: +(603) 2331 5000 (GL), +(603) 23926434 (DL) M : (6) 017 2000919