Kuala Lumpur, 20 February – Petronas Chemical Group Berhad (PCG) delivered its strongest performance since listing in 2010 with plant utilisation (PU) rate rising to 96% for 2016 far surpassing world-class benchmark in an environment that remained challenging with low prices and subdued demand.

The marked improvement in PU was the result of continuous focus on improving plant reliability and collaborations to secure higher feedstock supply. The resultant increase in sales volume helped PCG ride the impact of low petrochemical product spreads.

Average product prices fell 17% in 2016 compared to 2015.

Despite the drop, PCG’s revenue climbed 2.4% year-on-year to RM13.86 billion driven by higher sales volume, further supported by favourable foreign exchange impact.

Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) rose to RM5.29 billion from RM4.66 billion in the previous year surpassing a RM5 billion mark, benefitting from higher sales volume, lower unit cost, and margin maximisation initiatives which eased the impact of thin spreads.

As a result PCG 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.

PCG’s fourth quarter revenue increased 10.7% to RM3.95 billion compared against the preceding quarter with improved market conditions and favourable foreign exchange impact. EBITDA increased 1.8% to RM 1.48 billion.

EBITDA margin decreased 3 percentage point to 37.6%. PAT for the quarter was higher at RM1.03 billion compared to RM985 million in the preceding quarter.

For the year ended 31 December 2016, the Board of Directors declares a second interim dividend of 12 sen per ordinary share amounting to RM960 million, which will be payable in March 2017. This is in addition to the first interim dividend of 7 sen per ordinary share amounting to RM560 million, which was paid to investors in September 2016.

Reporting on PCG’s fourth quarter financial earnings, its Managing Director/Chief Executive Officer Datuk Sazali Hamzah said, “2016 has been a challenging year with continued uncertainties surrounding crude oil prices.

These uncertainties coupled with volume oversupply and soft demand, kept petrochemical product prices low thus suppressing margins.”

“Nevertheless, I am pleased with PCG’s 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.

“Moving forward, we will continue to hone in our efforts to further strengthen HSE culture and sustain world-class plant performance.”

Through our commercial excellence initiatives, PCG will increase efforts to enhance customer experiences to create greater value while continuing to grow strategic markets in the Asia Pacific region, Sazali said.

“We are excited to see our growth plans coming together as we bring in Sabah Ammonia Urea (SAMUR) 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.

“We also saw the successful production of on-specification 2-Ethylhaxanoic Acid (2-EHAcid) in late 2016. Work on the production facility for Highly Reactive Polyisobutene (HR-PIB) is progressing well, and we expect this facility to be commissioned in 2017, as planned.”

He said the petrochemicals projects within the Pengerang Integrated Complex (PIC) are currently progressing as planned including the newly-awarded engineering, procurement, construction and commissioning (EPCC) package for flexi polyethylene (Flexi PE) project.