KUALA LUMPUR: Petronas Chemicals Group Bhd's (PCG) net profit for the financial year ended Dec 31, 2023 plunged to RM1.69 billion from RM6.32 billion garnered a year ago.
PetChem said in a statement, moderating economic growth and slower-than-anticipated China recovery weighed in on the industry leading to lower product demand and softening prices.
Concurrently, geopolitical tensions kept energy prices high, resulting in higher feedstock costs and margin compression.
Revenue for the year declined to RM28.67 billion from RM28.95 billion.
For the fourth quarter, PetChem's net profit fell to RM112 million from RM481 million on the back of RM7.21 billion revenue versus RM8.70 billion previously.
Managing director and hief executive officer Mazuin Ismail said FY2023 was a tough year for the group, both on the market and operational fronts.
"Despite the persistent low spreads and operational challenges, we remain resilient with a healthy financial position," he added.
Mazuin said the performance test runs are currently ongoing at its petrochemical facilities in Pengerang, Johor.
"We are looking forward to achieving commercial operations at other new plants this year namely the melamine plant in Gurun, Kedah, the specialty chemicals plant in Sayakha, India for the production of pentaerythritol and calcium formate as well as the expansion of the 2-ethylhexanoic acid (2-EHA) plant in Gebeng, Pahang
through our JV company, BASF Petronas Chemicals," said Mazuin.
These three facilities, with a combined
annual capacity of about 130,000 tonnes per annum, mark several milestones in PetChem's two-pronged strategy towards achieving sustainable growth.
Mazuin said the challenges seen in 2023 are expected to continue into 2024 as economic recovery is expected to remain sluggish, but with pockets of opportunities in various sectors.
"The chemicals industry is cyclical in nature, we therefore expect the current downcycle will turn as demand catches up with supply," he said.
PetChem declared a dividend of five sen per share amounting to RM400 million payable on March 26.
Total dividends for FY2023 came in at 41 sen per share, totalling RM1 billion.
