Petronas Chemicals Group Bhd’s (PCG) shares tumbled 11% today after posting its largest quarterly loss since its listing in 2010, at RM1.08 billion for the second quarter ended June 30 (Q2 FY2025).
The integrated chemicals producer, which posted a RM777 million net profit a year ago, saw its earnings affected by lower product margins, huge unrealised foreign exchange losses, and asset impairments.
The stock fell as much as 44 sen or 11% to RM3.52 in the afternoon session, following the release of its Q2 financial results.
It managed to pare its losses to close 36 sen or 9.1% lower at RM3.60, valuing the group at RM28.8 billion. It was the 11th most active stock on Bursa Malaysia with 26.4 million shares traded. Year to date, the stock has fallen nearly 26%.
Revenue for Q2 fell 16% year-on-year to RM6.4 billion, impacted by lower sales volumes and product prices, reduced revenue from joint operations and the ringgit’s appreciation against the US dollar.
For the first six months of FY2025, the Petronas Group’s chemical arm posted a cumulative net loss of RM1.1 billion from a net profit of RM1.45 billion in the same period last year.
Revenue for the first half fell 7.4% to RM14.09 billion from RM15.23 billion last year.
Earnings before interest, tax, depreciation and amortisation (Ebitda) fell 56% to RM395 million, mainly due to weaker product spreads and reduced contribution from Pengerang Petrochemical Company Sdn Bhd (PPCSB).
Forex losses widened to RM446 million from RM62 million a year earlier, largely due to the unrealised forex impact from the revaluation of shareholder loans to PPCSB.
The group also recognised RM431 million in impairment losses on property, plant and equipment within its specialities segment, primarily at its Swedish unit Perstorp, which it acquired for RM7.31 billion in 2022.
PCG’s plant utilisation rate dropped to 77% from 94% in the previous quarter, as feedstock supply disruptions and repair and maintenance works impacted production.
Among the affected facilities was PC Fertiliser Kedah, which faced feedstock shortages due to the gas pipeline incident at Putra Heights, which was fully resolved as of June 2025.
Strategic portfolio review
The disappointing results has prompted the group to intensify its business review, cut costs and resize its workforce. In a statement, the company also said it was reassessing investments in joint ventures and associates.
Managing director and CEO Mazuin Ismail said in light of the increasingly dynamic market environment, PCG is undertaking a “strategic portfolio review across our entire value chain”.
“Although we faced market and operational challenges during the quarter, our financial position remains robust.
“Furthermore, our value creation and cost optimisation initiatives have led to more than RM200 million in improvement in Ebitda on a year-to-date basis. This has enabled us to declare an interim dividend of RM240 million,” he said in a statement.
The group declared a first interim dividend of three sen per share, down from 10 sen in the same quarter last year, payable in September.
