Petronas Chemicals reports higher revenue and profit but flags challenging outlook for the year

KUALA LUMPUR, Aug 19 - Malaysia's Petronas Chemicals Group reported increased revenue for the second quarter but expects a difficult operating environment for the remainder of the year due to geopolitical uncertainties, shifting trade policies and supply-demand imbalances.

The chemicals manufacturer, a subsidiary of the state-owned energy firm Petronas, reported a net profit of 414 million ringgit ($101.95 million) for the quarter ending June, up from a net loss of 1.08 billion ringgit in the same period a year ago.

Revenue grew to 7.9 billion ringgit ($1.95 billion) from 6.44 billion a year earlier.

The company's shares rose 1.28% to 4.73 ringgit by midday Wednesday. The earnings were attributed to strong demand and a widening gap between product prices and feedstock costs, despite major planned maintenance activities at several facilities that reduced production and sales volumes.

Chief Executive Mazuin Ismail noted in a stock exchange filing that the second quarter was operationally challenging as the company undertook significant planned turnaround activities at various plants in Kertih Integrated Petrochemical Complex (KIPC) and the urea plant in Bintulu.

Petronas expects the olefins and derivatives segment to remain stable, with prices primarily affected by feedstock cost fluctuations and producers' operating rates amidst persistent regional oversupply and competitive market conditions.

The fertilizers market remains optimistic due to global food security needs, tight supply conditions, and sustained import demand from key markets like India and Australia. Meanwhile, methanol prices are anticipated to stay stable due to balanced supply-demand fundamentals.

The company remains cautious about the specialties segment, given softening construction and automotive markets, while consumer goods demand showed slight growth.