PetChem returns to black as higher spreads lift earnings
KUALA LUMPUR: Petronas Chemicals Group Bhd (PetChem) returned to profitability in the second quarter ended June 30, 2026, supported by higher product spreads and stronger revenue despite a lower plant utilisation rate.
Petronas Chemicals Group (PetChem) turned profitable in the second quarter of 2026, driven by higher product spreads and improved revenue, according to its Bursa Malaysia filing. The company reported a net profit of RM414 million, marking a stark contrast to the RM1.08 billion loss it incurred in the same period last year. Revenue surged by 23% to RM7.9 billion, propelled by higher average product prices, although this was tempered by lower sales volume and the strengthening of the Malaysian ringgit against the US dollar.
Plant utilization dipped to 73%, primarily due to extended maintenance and turnaround activities at its facilities in Kertih Integrated Petrochemicals Complex (KIPC) and its urea plant in Bintulu.
For the first half of the year, PetChem's net profit rebounded to RM815 million, up from a net loss of RM1.1 billion, while revenue grew by 5.8% to RM14.91 billion, up from RM14.09 billion. The company announced a first interim single-tier dividend of six sen per ordinary share, amounting to RM480 million, payable in September. PetChem's managing director and CEO, Mazuin Ismail, acknowledged the operational challenges posed by major planned turnaround activities at KIPC and its Bintulu urea plant.
Despite reduced sales volumes, the company delivered robust financial results, bolstered by improved product spreads amidst the prolonged conflict in the Middle East and strategic focus on domestic and regional customers. Mazuin emphasized PetChem's commitment to safe execution, operational discipline, and business resilience as the company prepares for another major turnaround at its Plant 2 and ramps up operations at Pengerang Petrochemical Company Sdn Bhd in the third quarter.
The company warned of a challenging operating environment in 2026, citing geopolitical uncertainties, evolving trade policies, and supply-demand imbalances. PetChem remains vigilant, monitoring these developments and implementing measures to manage its portfolio and operational performance.
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