PETRONAS Chemicals Group Berhad (PCHEM) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 rose 4% year-over-year to MYR 15.2 billion, driven by higher sales volume and favorable foreign exchange impact, despite a 3% decline in average sales price.

• EBITDA increased 6% year-over-year to MYR 2.3 billion, with margin at 14.9% (up from 14.6% last year), supported by cost control and higher specialty segment contribution.

• Profit after tax reached MYR 1.5 billion, mainly due to finance income from deferred trade payables and payment timing adjustments, partially offset by unrealized Forex loss on a shareholder loan.

• Operational challenges included unplanned shutdowns and maintenance, but plant utilization improved to 88% for H1 2024.

• Financial resilience was maintained despite industry downturn, with commercial excellence and cost control.

Financial highlights

• Group revenue for Q2 2024 increased 9% year-over-year to RM7.7 billion; cumulative H1 2024 revenue was RM15.2 billion, up 4% year-over-year.

• EBITDA for Q2 2024 was RM1.1 billion, up 5% year-over-year; H1 EBITDA reached RM2.3 billion.

• Profit after tax for Q2 2024 increased 28% year-over-year to RM809 million; cumulative H1 PAT was RM1.5 billion, up 29% year-over-year.

• Cash and cash equivalents stood at RM9.4 billion as of 30 June 2024.

• Total assets increased to RM61.7 billion, mainly from higher receivables and PPE for growth projects.

Outlook and guidance

• Olefins & Derivatives segment expected to remain flat or soft amid weak downstream demand and new capacity in Asia.

• Urea prices forecasted to be firm due to Latin American demand; ammonia and methanol prices expected to be stable to soft.

• Specialty segment performance to track macroeconomic recovery, with cautious optimism but limited recovery expected in H2 2024.

• 2024 expected to remain challenging due to persistent headwinds in construction, automotive, and slow recovery in China.

• Ongoing geopolitical tensions and elections contribute to market uncertainty.