PETRONAS Chemicals Group Berhad (PCHEM) Q3 2025 earnings summary

Executive summary

• Q3 2025 saw improved operational performance with plant utilization rising to 89.5% from 77.4% in Q2, driving a 12% increase in production volume and 5% higher revenue at MYR 6.8 billion quarter-on-quarter, though revenue was down 15% year-over-year due to lower sales volume, product prices, and a stronger Ringgit.

• EBITDA increased 26% quarter-on-quarter to MYR 497 million, mainly due to higher spreads for 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, and improved from RM762 million in Q3 2024, mainly due to lower unrealised foreign exchange loss.

• Market conditions remain challenging with global oversupply and subdued demand, especially in olefins and derivatives, while fertilizer and methanol segments benefited from tighter supply and strong demand.

• 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.

• EBITDA margin improved to 7.3% from the previous quarter, but EBITDA for Q3 2025 was RM497 million, a 10% decrease year-over-year.

• Loss after tax reduced to MYR 291 million, mainly due to lower Forex losses and absence of exceptional items.

• Cash flow from operations for the nine months reached MYR 2.1 billion, with most cash used for investing and dividend payments, representing a 31% decrease year-over-year.

• 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

• Near-term outlook remains cautious with continued margin pressure from oversupply and weak demand in the chemicals industry, especially in olefins and derivatives.

• Olefins and derivatives expected to face persistent bearish conditions through 2026 due to new capacity and muted demand.

• Fertilizer and methanol segment outlook is bullish, supported by tight supply and strong demand, especially for urea and ammonia.

• Specialty segment faces soft demand and margin pressure, but is supported by new product launches and ongoing customer qualifications.

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