PETRONAS Chemicals Group Berhad (PCHEM) Q3 2025 earnings summary

Executive summary

• Q3 2025 saw improved operational performance and plant utilization, with utilization rising to 89.5%-90% from 77.4% in Q2, driving a 12% increase in production volume and 5% higher revenue quarter-on-quarter, though revenue was down 15% year-over-year due to lower prices and a stronger Ringgit.

• EBITDA increased 26% quarter-on-quarter to MYR 497 million, mainly due to higher product spreads in urea and ammonia and lower unrealized Forex losses, but was down 10% year-over-year.

• Loss after tax narrowed to MYR 291 million from MYR 1 billion in Q2, reflecting lower Forex losses and absence of exceptional items, but was still a loss compared to the prior year.

• Management remains focused on operational efficiency, cost optimization, and value creation amid challenging market conditions.

• For the nine months ended 30 September 2025, revenue was RM20.9 billion, down 10% year-over-year, and the group recorded a loss after tax of RM1.3 billion versus a profit of RM750 million in the prior period.

Financial highlights

• Revenue rose 5% quarter-on-quarter to MYR 6.8 billion, but was down 15% year-over-year due to lower sales volume and product prices.

• EBITDA margin improved to 7.3% from the previous quarter, but EBITDA for Q3 2025 was down 10% year-over-year.

• Loss after tax reduced to MYR 291 million, with loss after tax excluding exceptional items at MYR 217 million.

• Cash flow from operations for the nine months reached MYR 2.1 billion, with most cash used for investing and dividend payments.

• Total assets declined by MYR 1.1 billion due to currency effects and asset impairment; total equity fell by MYR 1.3 billion.

Outlook and guidance

• Market conditions for chemicals remain challenging due to oversupply and subdued demand, especially in olefins and derivatives, with price pressure likely to persist into 1Q 2026.

• F&M segment expected to remain firm, supported by urea demand and tight ammonia/methanol supply.

• Specialty segment faces weak demand in construction and automotive, but new product launches and innovation centers aim to capture growth.

• Plant utilization for 2026 is anticipated at 88%-90%, with scheduled turnarounds planned each quarter.

• Building and construction activity remains weak, while consumer goods demand is steady but cautious.