Latest news with #PetronasChemicals
New Straits Times
09-07-2025
- Business
- New Straits Times
Petronas Chemicals' earnings to stay weak as O&D spreads hit multi-year lows
KUALA LUMPUR: Petronas Chemicals Group Bhd's earnings are expected to remain under pressure in the coming quarters due to prolonged weakness in olefins and derivatives (O&D) spreads. In a research note, Maybank Investment Bank (Maybank IB) said the O&D subsector is still bearish due to the ongoing regional oversupply, mainly from China. It said O&D spreads continued to weaken in the second quarter of 2025, currently at multi-year lows since the Covid-19 pandemic in the first half of 2020. "This is given the ongoing regional supply glut, driven by fierce upcoming regional petrochemical complexes, mainly from China, due to the country's drive for self-sufficiency. "We are closely monitoring industry developments to identify any possible turnaround for the sector, as most naphtha-based petrochemical players are loss-making in the current environment," it said. Maybank IB said the weaker US dollar could result in unrealised foreign exchange (forex) losses, as the ringgit appreciated by five per cent against the greenback to 4.21 as at end-June 2025 from 4.43 at end-March 2025. Based on historical trends, the firm said Petronas Chemicals conducts a mark-to-market assessment and books in the forex impact on their assets on a quarterly basis. It said the company's upcoming second-quarter headline profits could be negatively affected by the revaluation of its shareholder loans to Pengerang Petrochemical Company (PPC), as well as the revaluation of the latter's payables. "Based on our estimates, Petronas Chemicals could register weaker core earnings in the second quarter due to a shutdown in PRefChem and declining O&D spreads," it said. Maybank IB, however, said a potential earnings upside could occur if the company's 50 per cent-owned PPC secures a "special discount" from PRefChem, contingent upon the latter's profitability following recent favourable gross refining margins. This subsidy could help offset PPC's losses and provide some relief to Petronas Chemicals' bottom line in the second half of 2025. Maybank IB kept its "Sell" call on the stock with an unchanged target price of RM2.59 a share.
Business Times
25-06-2025
- Business
- Business Times
Oil price rollercoaster hammers South-east Asia's top energy counters
[KUALA LUMPUR & JAKARTA] Oil and gas stocks (O&G) across Malaysia and Indonesia are giving up recent gains, following a volatile two-week rally driven by escalating tensions between Israel and Iran that had sent crude prices briefly surging. The two markets, home to South-east Asia's most actively traded energy counters, offer a clear snapshot of how regional investors are responding to geopolitical swings in global oil prices. By Wednesday (Jun 25), the short-lived oil price rally had sharply reversed, with benchmark Brent crude stabilising below US$70 per barrel – a steep drop from the five-month high of US$81.40 reached just two days earlier. The volatile trend in oil prices was clearly mirrored on Bursa Malaysia. By Wednesday's closing, the Bursa Malaysia Energy Index, which tracks 23 O&G counters, remained flat at 728.11 points. This marks a nearly 3.2 per cent decline compared with last Monday's performance, when the index stood at 752.16 points, its highest in a month. The abrupt turnaround came after US President Donald Trump announced on Monday that Israel and Iran had agreed to a 'complete and total' ceasefire, aiming to end the 12-day conflict. The ceasefire was set to take effect several hours after the announcement, with both sides allowed to complete ongoing military operations before it came into full force. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Major O&G counters experienced mixed trading on Wednesday, with most seeing a downtrend. A notable exception was Petronas Chemicals – the integrated chemical production arm of Malaysia's national oil company – which edged up 5.8 per cent to RM3.28, after the share price tumbled to five-day low of RM3.04. Velesto Energy, which provides offshore drilling services, increased around 2.8 per cent to RM0.19. Similarly, integrated technical services firm Dialog Group and offshore support services provider Dayang Enterprise rebounded less than 1 per cent on Wednesday. Hibiscus Petroleum, the country's first successful special purpose acquisition company and now a key independent upstream oil and gas producer, was one of last week's top gainers – on Wednesday, its share price dipped nearly 4.2 per cent to RM1.60, down from RM1.83 on Jun 23. Meanwhile, offshore support services provider Bumi Armada, Yinson (which specialises in maintenance and hook-up commissioning) and Petron Malaysia Refining and Marketing (a downstream player affiliated with the Philippines' Petron Corp) all posted declines of between 0.9 per cent and 1.6 per cent on Wednesday. In Indonesia, key oil producers that have surged in recent days also saw sharp selloffs erasing short-term gains. IDXENERGY, which tracks energy stocks in Jakarta, closed down 1.8 per cent on Wednesday. Shares of Medco Energi Internasional (MedcoEnergi), one of Indonesia's largest private O&G firms, and Energi Mega Persada, a prominent upstream producer, dropped 4.6 per cent and 6.3 per cent respectively. The drop in MedcoEnergi's share price has wiped out nearly four trillion rupiah (S$314 million) from its market valuation over the past few days. Meanwhile, shares of Rukun Raharja, a natural gas infrastructure operator, tumbled 9 per cent to 2,280 rupiah, posting their sharpest decline in a week. The stock had previously climbed to 2,750 rupiah per share on Jun 19, but has since lost momentum amid broader market volatility. Uncertainties loom While oil prices have cooled, the underlying geopolitical risks persist. JPMorgan warns that any escalation, such as a blockade of the Strait of Hormuz, could drive oil prices to US$120 per barrel. However, if the conflict subsides, analysts expect prices to hover near current levels. The Strait of Hormuz remains a vital chokepoint for global energy trade, handling 34 per cent of seaborne oil exports, 30 per cent of liquefied petroleum gas, and 20 per cent of liquefied natural gas shipments, according to shipbroker Clarksons. Any disruption in this narrow passage could have an outsized impact on global energy prices. Herald van der Linde, HSBC's head of Asia equity strategy, highlighted that rising oil prices and heightened risk premiums pose downside risks to Asian equities. 'Korea, Taiwan and Thailand are most vulnerable due to their strong correlation with oil prices, while Hong Kong and Indonesia show less sensitivity,' he told The Business Times. Malaysia's economy and currency are also oil-sensitive, given petroleum's role in fiscal revenues and trade. While O&G companies make up a modest portion of Bursa's market capitalisation, energy price swings affect cash flows of both importers and exporters. Azril Rosli, economist at Maybank Investment Bank, said that the oil trade is a main concern for Malaysia as well as Asean, as the region is a net importer. Surging oil prices could worsen trade balances and fuel inflation through higher energy and petroleum-based product costs. Brian Lee, economist at Maybank Securities Singapore, noted that current oil prices (below US$80) are not yet a major concern for Indonesia, which has budgeted US$82 per barrel for 2025. 'However, sustained prices above US$90 could strain Indonesia's budget, potentially forcing hikes in subsidised fuel prices as subsidies approach the fiscal limit of 3 per cent of the country's gross domestic product,' said Lee. Sector winners Malaysia's economy and currency are also oil-sensitive, given petroleum's role in fiscal revenues and trade. PHOTO: CMG Despite the turmoil, upstream oil producers remain best positioned to benefit from higher crude prices if tensions resurface. Upstream service providers with exposure to maintenance works are expected to demonstrate earnings resilience in coming quarters. Macquarie Capital's head of Thailand Research Kaushal Ladha anticipates that upstream producers and refineries will benefit the most, especially if China's reliance on Iranian crude is disrupted, tightening regional supply and boosting refining margins. In Indonesia, Ladha highlighted MedcoEnergi as a winner due to its exploration and production activities. Geopolitical risk premiums for crude directly improve earnings for these companies, though most Asian crude grades see limited premiums over benchmarks. In Malaysia, CGS International analyst Raymond Yap said upstream players such as Hibiscus Petroleum and Dialog are expected to benefit from higher oil prices, with CGS International maintaining an 'overweight' rating on the sector. Hong Leong Investment Bank raised its average Brent oil price forecast for 2025 to US$67 per barrel, citing increased geopolitical risk, and expects upstream activities – especially exploration and drilling – to benefit firms such as Hibiscus Petroleum and Velesto Energy. As for downstream players, including chemical producers, Macquarie's Ladha said they may face margin pressure from increased feedstock volatility, with integrated players experiencing mixed effects. CGS International shared a similar view, issuing 'reduce' recommendations for related companies such as Petronas Dagangan, Petronas Chemical, and Lotte Chemical Titan. Risks Upstream oil producers remain best positioned to benefit from higher crude prices if tensions resurface. PHOTO: REUTERS Sector downside risks include lower oil prices if Iran sues for peace, Opec+ (the Organization of Petroleum Exporting Countries and allies) overproduces, or global oil demand declines amid trade pressures, such as potential US 'Liberation Day' tariffs, said analysts. Lim Sin Kiat, senior equity analyst at Kenanga Research, expects the current tensions to ease, with oil prices trending lower in late 2025 as Opec+ retains ample spare capacity. He sees a US$90 per barrel scenario as unlikely, with de-escalation as the base case. Rully Arya Wisnubroto, chief economist and head of research at Mirae Asset Sekuritas, expects short to medium-term volatility to remain elevated, with energy prices and demand for safe-haven assets likely to stay high. 'This situation may trigger significant foreign capital outflows from the Indonesian stock market, especially from stocks with high foreign ownership,' he told BT.
New Straits Times
09-06-2025
- Business
- New Straits Times
Bursa Malaysia ends morning session firmer
KUALA LUMPUR: Bursa Malaysia ended in positive territory at midday on renewed interest in selected blue chips, led by MISC, Tenaga Nasional and Petronas Chemicals. MISC jumped 18 sen to RM7.78, Tenaga Nasional edged up 10 sen to RM14.30, and Petronas Chemicals bounced seven sen to RM3.32. These three counters contribute 16.07 points to the composite index. At 12.30 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) was 3.37 points higher at 1,520.16 from Friday's close of 1,516.79. The benchmark index opened at 1,518.06, 1.27 points higher, and subsequently fluctuated between 1,518.03 and 1,521.64 throughout the morning session. The broader market was also positive, with gainers outnumbering decliners 436 to 369. A total of 424 counters remained unchanged, 1,131 were untraded, and 20 were suspended. Turnover stood at 1.67 billion units, valued at RM888.2 million. Kenanga Investment Bank Bhd said in a research note today that the FBM KLCI is expected to extend its rebound this week, barring any negative surprises from US inflation data or trade developments. "Stocks in focus include Maybank, Public Bank, Tenaga Nasional, Sunway, and YTL Power, which have shown encouraging technical setups after recent pullbacks," it said. Among the heavyweight counters, Maybank was flat at RM9.70, Public Bank was unchanged at RM4.26, while CIMB and IHH added four sen each to RM6.88 and 6.90, respectively. CelcomDigi dropped five sen to RM3.80. Among the most active stocks, MPire bagged three sen to 12 sen, MYEG dipped half-a-sen to 94 sen, Ta Win was flat at two sen, and Tanco erased two sen to RM1.01. On the index board, the FBM Emas Index added 35.78 points to 11,391.12, the FBMT 100 Index gained 33.84 points to 11,157.53, and the FBM Emas Shariah Index climbed 40.02 points to 11,369.24. The FBM 70 Index advanced 85.83 points to 16,382.40. However, the FBM ACE Index erased 17.47 points to 4,501.85. Sector-wise, the Financial Services Index topped up 36.78 points to 17,745.10, the Energy Index gained 3.27 points to 721.72, and the Industrial Products and Services Index perked up 0.94 of a point to 151.74. The Plantation Index firmed 0.95 of a point to 7,253.80.
The Sun
06-06-2025
- Business
- The Sun
Bursa Malaysia stays lower in mid-afternoon
KUALA LUMPUR: Bursa Malaysia stayed lower in mid-afternoon today as investors sold selected heavyweight stocks, led by industrial products and services, ahead of the weekend, analysts said. At 3.05 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) dipped 2.26 points to 1,515.86 from Thursday's close of 1,518.12. The benchmark index opened at 1,516.91, down 1.21 points. The broader market remained negative, with decliners outnumbering gainers 508 to 247. A total of 440 counters remained unchanged, 1,151 untraded and 20 suspended. Turnover stood at 1.31 billion units, valued at RM890.93 million. Malacca Securities Sdn Bhd said technically, the benchmark index's resistance is anticipated at around 1,533-1,538 and support at 1,498-1,503 today. Of the heavyweights, Petronas Chemicals lost 11 sen to RM3.25, Petronas Dagangan fell by 24 sen to RM20.90, and Press Metal Aluminium eased 4.0 sen to RM4.99. CelcomDigi slipped 3.0 sen to RM3.84, and CIMB was down 5.0 sen to RM6.82. Among the most active stocks, Tanco added 2.0 sen to RM1.02, MYEG eased half-a-sen to 92.5 sen, and Reservoir Link Energy was flat at 35.5 sen. Gamuda rose 2.0 sen to RM4.76, and Signature Alliance Group gained 1.5 sen to 71.5 sen. On the index board, the FBM Emas Index lost 14.80 points to 11,348.03, the FBMT 100 Index cut 11.16 points to 11,117.20, and the FBM ACE Index erased 25.64 points to 4,492.50. The FBM Emas Shariah Index gave up 20.09 points to 11,320.65, but the FBM 70 Index gained 5.11 points to 16,288.42. Sector-wise, the Financial Services Index reduced 30.79 points to 17,708.78, and the Industrial Products and Services Index was 1.25 points lower at 150.87. However, the Energy Index rose 8.80 points to 717.41 and the Plantation Index grew 29.15 points to 7,248.53.
The Sun
20-05-2025
- Business
- The Sun
Petronas Chemicals reports RM18 million net loss in Q1 as forex weighs
KUALA LUMPUR: Petronas Chemicals Group Bhd reported a net loss of RM18 million in the first quarter ended March 31, 2025 (Q1'25) due to unrealised foreign exchange losses, unfavourable net foreign exchange impact from the specialities segment, among others, despite recording a higher revenue of RM7.66 billion. The group achieved a profit of RM668 million and a revenue of RM7.50 billion in Q1'24. In a Bursa Malaysia filing yesterday, Petronas Chemicals said the quarter's higher revenue was mainly due to higher sales volume, partially offset by the strengthening of the ringgit against the US dollar. It said the reduction in net profit was mainly due to unrealised foreign exchange loss on revaluation of a shareholders loan to a joint operation entity, lower finance income arising from adjustment of timing for payment of trade payables in the preceding quarter and unfavourable net foreign exchange impact from the specialities segment. A higher plant utilisation rate of 94% was recorded compared to 87% in the previous corresponding quarter due to improved plant performance as well as lower statutory plant turnaround and maintenance activities, mainly from fertilisers and methanol segment, resulting in higher production. On prospects, the group said the results of its operations were primarily influenced by global economic conditions and petrochemical product prices, which have a high correlation to crude oil price, particularly for the olefins and derivatives (O&D) segment, utilisation rate of its production facilities and foreign exchange rate movements. The utilisation of production facilities is dependent on plant maintenance activities and sufficient availability of feedstock as well as utilities supply, Petronas Chemicals said 'The group will continue with its operational excellence programme and supplier relationship management to sustain plant utilisation level at above industry benchmark,' it said. Petronas Chemicals anticipates product prices for O&D will be impacted by the implications of the United States (US) tariffs, additional supply from new capacities and weak downstream demand. 'Fertiliser product prices are forecasted to be firm with limited supply from the Middle East amidst seasonal demand from India, Southeast Asia and Australia. 'However, ammonia and methanol product prices are forecasted to be soft due to ample supply and persistent weak demand from industrial and gasoline blending sectors,' it added. For specialties, Petronas Chemicals said the group remains cautious in navigating the challenging market conditions, as we anticipate demand uncertainty to persist across most of our end markets. Commenting on the Q1'25 performance, its managing director and CEO, Mazuin Ismail, said the group's resilience in navigating the challenging market landscape underscores the strength of its diversified portfolio. 'The improvement in earnings before interest, taxes, depreciation, and amortisation reflects our ongoing efforts on operational excellence with commendable plant utilisation rate achieved by our commodities business, despite setbacks in January 2025 that temporarily impacted operations at several plants in Kertih, Kemaman District, Terengganu,' he said. Meanwhile, regarding the implications of US tariffs, Mazuin said Petronas Chemicals is closely monitoring these developments and assessing broader implications on the overall market dynamics. He added that the group remains focused on driving excellence to maintain its resilience and competitiveness amid the current industry downturn. 'Our unwavering commitment to safe and efficient operations across all facilities continues as we are currently undertaking repair and maintenance activities at several O&D and F&M plants,' he said. Mazuin said Petronas Chemicals is also strengthening customer relationships to better meet their evolving needs while upholding strict financial discipline and prudent capital spending. – Bernama
