20 · May · 2020
PCG Remains Resilient, Posts 1Q Profit Of RM493 Million Amidst COVID-19 Challenges And OPEC+ Fallout
Kuala Lumpur, 20 May – PETRONAS Chemicals Group Berhad (PCG) reported profit after tax of RM493 million for 1Q 2020 despite operating in an unprecedented environment. The Group maintained strong operational performance with high plant utilisation rate and sales volume.
The Group’s earnings were impacted by the sharp decline in petrochemical product prices following the outbreak of COVID-19. The industry downcycle deepened as crude oil prices collapsed due to the OPEC+ fallout and the recessionary global economic outlook.
Key highlights 1Q 2020 vs 1Q 2019
- Operations remained strong during 1Q 2020, as the Group registered high plant utilisation rate of 94%, comparable to 1Q 2019.
- Revenue declined 6% year-on-year to RM3.9 billion due to lower product prices, underpinned by low demand and high supply environment coupled with weak crude oil prices.
- The resulting lower product spreads and margin compression led Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA) margin to decline to 20%.
- EBITDA and Profit after Tax (PAT) stood at RM764 million and RM493 million, respectively during the quarter, both lower by 39% compared to 1Q 2019.
Commenting on the results, Managing Director/Chief Executive Officer, Datuk Sazali Hamzah said, “2020 started off as an unprecedented year for most industries in the wake of the COVID-19 pandemic followed by the OPEC+ fallout. Nevertheless, the Group continued to demonstrate resilience in 1Q 2020 by maintaining our operational efficiency, customer centricity and diverse product portfolio. Our solid operational and commercial capabilities allow us to be responsive to market changes. We have been able to circumvent the disruptions from lockdowns that are happening worldwide and sustain our business.”
“Despite operating in a challenging period, we continue to be focused on our growth strategy. In 2020, we will proceed with the commissioning and commercialisation of our chemical plants within the Pengerang Integrated Complex.”
On PCG’s outlook, Datuk Sazali said, “The COVID-19 pandemic and OPEC+ fallout have heightened economic as well as market uncertainties. Product prices will generally remain under pressure in this difficult environment. It is imperative that we remain resilient as we face the full impact of the pandemic and subsequent economic downturn. We are confident that our Business Continuity Plan will ensure that we overcome these challenging times.”
PCG joined nationwide efforts to support the country in combating the COVID-19 pandemic. The Group contributed its products and essential items as part of its PCG COVID-19 Relief Programme:
- Donated raw materials such as polypropylene for the production of approximately 300,000 face shield frames to be supplied to government hospitals and clinics nationwide
- Supplied hypochlorite solution for mass desanitisation of Sipitang town in Sabah
- Provided equipment for the production of personal protective gears in some local areas of operations
- Distributed essential items to B40 communities affected by the Movement Control Order in our areas of operations