KUALA LUMPUR (Feb 21): Petronas Chemicals Group Bhd (KL:PCHEM) has swung back to the black in the fourth quarter thanks to foreign exchange (forex) gain, reversing its first-ever quarterly loss in the immediate preceding quarter.

Net profit for the fourth quarter ended Dec 31, 2024 (4QFY2024) surged to RM519 million from RM112 million in 4QFY2023, as revenue increased 3.4% to RM7.46 billion versus RM7.21 billion previously, according to the group’s bourse filing on Friday.

The rise in profit was due to a hefty net forex gain of RM748 million booked in 4QFY2024, versus 4QFY2023’s RM115 million net forex loss. It explained the forex gain was linked to a revaluation of shareholders loan to a joint venture entity.  

Operationally, the higher revenue was on the back of higher sales, offset by the strengthening ringgit versus the US dollar and lower product prices. Plant utilisation rate rose to 95% as compared to 84% a year ago.

In the immediate preceding quarter, 3QFY2024, Petronas Chemicals fell to its first quarterly loss since listing more than a decade ago of RM789 million, dragged by a RM1.1 billion forex loss.

Petronas Chemicals declared a second interim dividend of three sen per share, payable on March 20. This brought the total dividend payout for the financial year ended Dec 31, 2024 (FY2024) to 13 sen per share, equal to what was declared for FY2023.

On full-year performance, Petronas Chemicals’ net profit for FY2024 fell 30.7% to RM1.18 billion from RM1.7 billion in FY2023, while revenue rose 7% to RM30.67 billion versus RM28.67 billion previously.

Looking ahead, Petronas Chemicals managing director and chief executive officer Mazuin Ismail said market conditions are expected to remain unchanged in 2025 in view of uncertainties posed by changing geoeconomic policies.

“We still must contend with oversupply in global petrochemical products, even as demand recovers given that capacity additions are expected to exceed demand growth by approximately 50% this year (2025)," Mazuin said.

“From late 2024 and into 2025, we have observed decline in prices and spreads in olefins and derivatives with signs that Southeast Asia integrated spreads [are] anticipated to remain in a trough,” he added.

In terms of what this means for the group, Mazuin said it remains focused on ensuring safe and efficient operations, maintaining a close eye on the market and strengthening its financial discipline.

At the noon break on Friday, shares in Petronas Chemicals stood 10 sen or 2.7% higher at RM3.80, valuing the group at RM30.4 billion.