Its revenue, meanwhile, rose 14% from RM6.63 billion in Q1 FY2022 to RM7.56 billion due to the inclusion of revenue contribution from a recently acquired subsidiary. Another factor was higher sales volumes, although they were partially offset by lower product prices.
On a quarterly basis, PetChem’s net profit grew 11% from RM481 million while its revenue dropped 13%.
The company attributed the quarterly drop in revenue to lower sales volume due to weak demand stemming from global economic uncertainties, and lower product prices in line with the decline in energy prices.
The olefins and derivative segment posted a higher revenue of RM3.4 billion, a 24% increase which the group said was largely due to higher sales volumes and the weakening of the ringgit against the US dollar.
In the meantime, the specialty segment’s revenue tripled to RM1.7 billion, primarily due to the inclusion of a recently acquired subsidiary.
On the other hand, the fertilisers and methanol segment’s revenue decreased by 27% to RM2.4 billion, caused mainly by lower product prices but partially offset by the weakening of the ringgit.
“Though we saw some positive movements in selected regions in the first quarter, the overall chemical sector remains cautious given the still volatile energy prices,” said the group’s managing director and CEO Yusri Yusof.
“There has been some uplift in demand from China post-Chinese New Year for selected chemicals, but we have yet to see a meaningful recovery. Operating costs, on the other hand, have increased due to the effects of inflation on gas and fuel giving rise to energy and utilities costs, further narrowing product spreads and adding pressure,” he added.
The group is maintaining a cautious outlook for 2023, predicting that global economic and geopolitical uncertainties would pose a negative impact on its financials.
“We continue to be cautious of the outlook for 2023, given the recent developments in the US banking sector and its potential impact to the global economy, the prolonged Russia-Ukraine conflict as well as slower-than-expected China recovery,” said Yusri.