KUALA LUMPUR (Aug 16): Petronas Chemicals Group Bhd (KL:PCHEM) on Friday flagged plant turnarounds planned in the remaining months of 2024, which may weigh on output and volume. 

The plant utilisation rate — a measure of actual output compared to total capacity — improved to 89% in the April-June quarter, from 87% in January-March, contributing to an increase in production volume and sales.

“Moving into the second half of the year, on the operations front, we have a few plant turnaround and maintenance activities planned,” said Petronas Chemicals managing director Mazuin Ismail in a statement. “Our immediate focus is on safe execution of these activities.”

The so-called statutory turnaround activity in the oil and gas industry typically involves shutting down some refineries' operations for maintenance or upgrades. Turnarounds are typically planned extensively, due to the cost involved and potential revenue loss.

On Friday, Petronas Chemicals reported that its net profit climbed 24% for the second quarter ended June 30, 2024 (2QFY2024) from a year earlier, thanks to higher sales volume and finance income.

Net profit for the three months was RM777 million, compared with RM628 million for 2QFY2023, Petronas Chemicals said in an exchange filing. Revenue for the quarter rose 8.6% year-on-year to RM7.73 billion, from RM7.11 billion.

Petronas Chemicals also declared its first interim dividend of 10 sen per share, involving a distribution of RM800 million and payable on Sept 12.

Product prices for olefins and derivatives are expected to be “soft”, amid weak downstream demand and returning supply from regional turnarounds, Petronas Chemicals said. Fertiliser product prices would be “firm” with increased agricultural activities, while ample supply weighs on methanol prices, it said.

The specialties segment is expected to see “limited recovery”, as global market conditions remain uncertain with ongoing geopolitical tension and “continued slow recovery in market demand”, the company added.

“Headwinds are expected to persist” in the building and construction sector, while the automotive sector shows indications of “flattish demand” in the second half of 2024, despite “selective improvement” in the consumer goods sector, Mazuin said.

Petronas Chemicals is also looking forward to commercial operations of the PCG PCC Oxyalkylates plant in Kertih, Terengganu, he added.

The plant is operated by a joint venture between Petronas Chemicals and Germany’s PCC SE to produce oxyalkylates, a group of chemicals used in manufacturing of detergents and foam mattresses.

For the first half ended June 30, 2024 (1HFY2024), net profit rose 25% to RM1.45 billion, versus RM1.16 billion in 1HFY2023. Cumulative revenue, meanwhile, edged up 3.8% to RM15.23 billion from RM14.67 billion.