By DayakDaily Team
KUCHING, Nov 21: PETRONAS Chemicals Group Berhad (PCG) reported a loss after tax (LAT) of RM762 million for the third quarter ended Sept 30, 2024, primarily driven by unrealised foreign exchange (forex) losses.
These losses stemmed from the revaluation of payables at Pengerang Petrochemical Company Sdn Bhd (PPC) and the revaluation of shareholder loans to PPC.
During the quarter, the US Dollar weakened significantly against the Malaysian Ringgit, declining from 4.721 on June 30, 2024, to 4.107 on Sept 30, 2024. Excluding the impact of forex losses, PCG’s profit after tax (PAT) was estimated at RM352 million.
According to a media release, PPC is a 50:50 joint-venture company between PCG and Saudi Aramco, located within the Pengerang Integrated Complex (PIC) in Johor. The complex includes four polymers and a glycols plant with a total design capacity of 3.0 million metric tonnes per annum.
The facilities completed the performance test runs in 3Q 2024 ahead of its commercial operation targeted by the end of 2024.
As PPC operates using the US Dollar as its functional currency, the depreciation of the dollar against the ringgit resulted in an unrealised forex loss of RM536 million on the revaluation of its payables.
Additionally, a shareholder loan provided by PCG to PPC, denominated in USD, incurred an unrealised forex loss of RM492 million. Including RM86 million in forex losses from other operations, PCG recorded a total forex loss of RM1.1 billion for the quarter.
PCG managing director and chief executive officer Mazuin Ismail attributed the loss to adverse currency movements.
“Our financial performance for the quarter was severely affected by the adverse movement of USD against RM primarily from our investment in PPC.
“Operationally, the performance of our core business improved in 3Q 2024 as we recorded higher plant utilisation at our Malaysian operations, contributing to higher sales volumes,” he said.
Mazuin highlighted the completion of performance test runs at PPC’s petrochemical units, positioning the company for commercial operations by the end of 2024.
He described the achievement as a critical step in strengthening PCG’s basic chemicals business while advancing diversification into derivatives and specialty chemicals.
However, Mazuin cautioned that the start-up of large-scale, capital-intensive projects like PPC would continue to impact the Group’s earnings, including the forex translation effects seen this quarter.
“If the USD continues to rebound in fourth quarter, there will be partial reversal of the unrealised forex loss,” he added.
Commenting on market conditions, Mazuin noted softness in the olefins and derivatives (O&D) segment due to seasonal downstream demand weakness and new supply from Northeast Asia.
The fertilisers and methanol (F&M) segment showed signs of stabilisation as major suppliers fulfilled term commitments. Meanwhile, the specialties segment remains under pressure due to ongoing macroeconomic uncertainties. — DayakDaily
