PETRONAS Chemicals Group Berhad (PCHEM) Q3 2024 earnings summary

Executive summary

• Group revenue rose 8% year-on-year to RM23.2 billion, driven by higher sales volume across all segments, despite a 1% decline in average product prices.

• EBITDA declined to RM2.8 billion, with margin dropping to 12% from 15%, mainly due to unrealised forex losses and higher operating costs at PPC.

• PAT fell to RM750 million from RM1.6 billion year-on-year, mainly due to lower EBITDA, forex losses, and JV/associate losses.

• Plant utilisation improved to 89% for 9M 2024 (from 85%), with Q3 2024 at 92%, supporting higher production and sales.

• Profitability was impacted by significant unrealised non-cash forex losses and higher costs at PPC.

Financial highlights

• Q3 2024 revenue was RM7,986 million (up from RM6,784 million in Q3 2023); cumulative 9M revenue: RM23,213 million (up from RM21,454 million in 9M 2023).

• EBITDA for 9M 2024 fell to RM2.8 billion from RM3.1 billion, with margin dropping to 12.2% from 14.6%.

• Q3 2024 net loss: RM762 million (vs. profit of RM439 million in Q3 2023); 9M 2024 net profit: RM750 million (down from RM1,608 million in 9M 2023).

• Cash flow from operations in 9M 2024 was RM3.1 billion, with significant outflows for CapEx and dividends.

• Total assets as of 30 Sep 2024: RM57.2 billion (down from RM60.2 billion at end-2023), mainly due to forex translation and higher depreciation.

Outlook and guidance

• O&D product prices expected to remain subdued due to weak Chinese demand, high inventories, and new capacity in Northeast Asia.

• F&M segment prices anticipated to be stable, supported by demand from India, seasonal factors, and supply constraints.

• Specialties segment faces continued challenges from sluggish end-market demand, especially in Europe, China, and construction.

• 2025 will be a heavy turnaround year, with four major turnarounds and six feedstock changes, likely impacting plant utilisation.

• Commissioning of Pentaerythritol plant and commercial operations at Pengerang Petrochemical Complex targeted for 4Q 2024.