PCG Recorded Breakthrough Performance in 2018 Well-positioned to Pursue Next Phase of Growth

Kuala Lumpur, 29 April 2019 – PETRONAS Chemicals Group Berhad (PCG) held its annual general meeting (AGM) today to present the Company’s performance to its shareholders for the financial year ended 31 December 2018.

Describing the overall performance of the Group, Managing Director/Chief Executive Officer of PCG, Datuk Sazali Hamzah said, “PCG recorded breakthrough achievements since listing despite heaviest year of plant turnaround."

Operations
Speaking at the post AGM media conference, Sazali said that in 2018, the Company achieved highest production volumes at 10.4 million tpa amidst heavy statutory turnaround at several major plants within its integrated chain. Alongside this, the Company also sustained best in class plant utilisation rate at 92%. This is a result of PCG’s continuous focus on effective plant reliability and turnaround excellence, coupled with collaborative efforts with its feedstock suppliers and utilities providers to ensure reliable feedstock and utilities supplies.

Commercial
For the year 2018, PCG recorded its highest sales volume at 8.4 million tpa compared to 8.1 million tpa in 2017. PCG also attained world class level of Order Fulfillment Reliability (OFR) at 93% with timely product deliveries to customers.

“Emerging and developing Asian economies recorded strong growth, which led to steady regional petrochemicals demand growth. Together with improvement in crude oil price from USD54/bbl in 2017 to USD71/bbl in 2018, as well as supply deficit of our key products, these factors resulted in higher product prices which impacted positively on our business,” he said.

Sazali further elaborated that the Company’s commercial excellence initiatives have also enabled PCG to deliver a total of 64 product applications and solutions to address customers pain points and requirements.

Financial
PCG registered strong revenue growth of 12.5%, an increase of RM2.2 billion from RM17.4 billion to RM19.6 billion. The record breaking revenue was primarily driven by higher sales volumes which benefitted from higher production as well as improved average product prices, despite the strengthening of the Ringgit Malaysia against the US Dollar.

PCG’s EBITDA for 2018 increased by 5.2 per cent to RM7.0 billion against RM6.6 billion in 2017, while its EBITDA margin stood at 35.6 per cent.

The Company’s Profit After Tax (PAT) for the year also grew by 14.6 per cent to RM5.1 billion as compared to RM4.4 billion reported in the previous year.

Following the landmark year for PCG, with the Company’s Earnings per Share hitting an all-time high since listing at 62.2 sen, the Board of Directors declared a cumulative dividend of 32 sen per share. At RM2.6 billion, this is the highest total dividend payout for the Company.

Growth
Speaking to the media on PCG’s growth strategy, Sazali said, “We pursue our two-pronged strategy to deliver sustainable long-term growth for our business. Having delivered on the initial phase of growth since listing in 2010, we are now well-positioned to focus our efforts on the second-prong of the strategy to selectively diversify into derivatives and specialty chemicals.”

During the initial phase of growth, we have ventured into specialty chemicals with BASF PETRONAS Chemicals Sdn Bhd for 2-Ethylhexanoic Acid, Highly Reactive Polyisobutene and Integrated Aroma Ingredients Complex which have reached commercial operations between 2016 and 2018.

Our Pengerang Integrated Complex (PIC) petrochemical projects is another platform to provide further growth opportunities in derivatives and specialty chemicals. As of March 2019, the petrochemical plants at PIC are progressing well at 97.7% project completion and expected to commence commercial operations in the fourth quarter of 2019.

We are firmly on course with our growth plans focusing on three growth levers:

• Extending value to existing basic chemicals through downstream investment in derivatives and specialty chemicals.
• Building new derivatives and specialty chemicals platform focusing on technology and market access. This can be achieved among others, through mergers and acquisition.
• Seeding innovative and emerging technologies via internal research and development and investment through corporate venture capital.

Outlook
Sazali shared that the global economic growth is expected to fall slightly below the previous year from 3.7% in 2018 to about 3.3% in 2019. However, the Company view the petrochemical industry to remain competitive given the strong fundamental of supply and demand of the industry, coupled with solid GDP growth in Asia Pacific.

As a key player in the Asia Pacific, PCG is ready to take advantage of opportunities that arise and weather any challenges it may face, by focusing efforts to maintain competitive position and delivering strategic priorities for a sustainable future.