KUALA LUMPUR (May 21): PETRONAS Chemicals Group Bhd (KL:PCHEM) swung to profit in the first quarter from a year earlier as cheaper inputs and lower expenses offset lower revenue.

Net profit for the three months ended March 31, 2026 (1QFY2026) was RM401 million after four straight quarters in the red, according to an exchange filing. Revenue for the quarter fell 8% year-on-year to RM7.02 billion.

“The operating environment is expected to remain volatile, shaped by ongoing geopolitical developments, supply chain disruptions and softer downstream demand,” PETRONAS Chemicals said.

No dividend was declared. 

A spike in product prices in the wake of geopolitical conflict in the Middle East has contributed to the turnaround of PETRONAS Chemicals, which was previously grappling with supply glut in the petrochemical industry and weak demand.

The average selling prices of urea, mostly used in production of fertilisers, rose 18% in the first quarter. Methanol, a key industrial chemical in manufacturing of adhesives and plastics, was up 13%.  

Moving forward, prices of olefins and derivatives are expected to moderate as affordability constraints weigh on demand from downstream manufacturers, the company said, noting that fertilisers will remain supported in part by export restrictions in key producing regions.

Methanol supply is set to tighten on scheduled regional plant turnarounds, PETRONAS Chemicals flagged.

“In the specialties segment, the group remains cautious given the subdued construction and automotive end markets, while demand for consumer goods is showing modest growth,” PETRONAS Chemicals added.

At Thursday's midday break, shares of PETRONAS Chemicals were down 1.9% or 11 sen to RM5.59, valuing the company at RM45 billion ahead of the results announcement.