KUALA LUMPUR — Petronas Chemicals (PetChem) said despite a drop in average product prices from 17% in 2016 compared to 2015, the company revenue climbed 2.4% year-on-year to RM13.86 billion.
The company said the revenue jump was driven by higher sales volume, further supported by favourable foreign exchange impact.
Managing director and chief executive officer Datuk Sazali Hamzah said: “2016 has been a challenging year with continued uncertainties surrounding crude oil
“These uncertainties coupled with volume oversupply and soft demand, kept petrochemical product prices low thus suppressing margins.
“Nevertheless, the company saw impressive performance for the year on the back of our operational and commercial excellence, anchored by Health, Safety and Environment (HSE) commitment which remains a top priority in every aspect of our operations,” he said.
Moving forward, Sazali said the company will continue to hone in its efforts to further strengthen HSE culture and sustain world-class plant performance and continuing to grow strategic markets in the Asia Pacific region.
“We are excited to see our growth plans coming together as we bring in Sabah Ammonia Urea plant to our capacity this year. We have successfully produced on-specification urea and are now in the process of ramping up the plant for full commercial operations.”
“Our projects with BASF through our associate company, BASF Petronas Chemicals Sdn Bhd, at its plant in Gebeng, Pahang are well within the range of start-up schedule and we expect the production units for the Citral, Citronellol and L-Menthol to come on-stream in phases in 2017,” he said.
The company also saw the successful production of on-specification 2-Ethylhaxanoic Acid in late 2016. Work on the production facility for Highly Reactive Polyisobutene is progressing well, and we expect this facility to be commissioned in 2017, as planned.
“The petrochemicals projects within the Pengerang Integrated Complex are currently progressing as planned including the newly-awarded engineering, procurement, construction and commissioning package for flexi polyethylene project,” he added.
Earnings before interest, taxes, depreciation and amortisation rose to RM5.29 billion from RM4.66 billion in the previous year surpassing a RM5 billion mark, benefiting from higher sales volume, lower unit cost, and margin maximisation initiatives which eased the impact of thin spreads.
As a result PetChem recorded a stellar 38% margin, its highest annual margin since listing.
Profit after tax (PAT) for the year edged up to RM3.22 billion from RM3.09 billion in 2015. Excluding a one-time write off of RM244 million, PAT for the year would have been RM3.47 billion, 12% higher than the previous year.