PETRONAS Chemicals Group Berhad: A Deep Dive into Q2 2025 Financial Performance

PETRONAS Chemicals Group Berhad (PCG) has released its financial results for the second quarter ended June 30, 2025, revealing a challenging period marked by operational headwinds and shifting market dynamics. The company reported a significant downturn in profitability compared to the same period last year, impacted by lower sales volumes, currency fluctuations, and specific plant maintenance activities. As global markets continue to navigate economic uncertainties, the petrochemical sector faces a complex set of challenges and opportunities, which are clearly reflected in PCG’s latest report. This analysis provides a detailed breakdown of the group’s performance, segment-specific results, and management’s outlook for the coming months.

Quarterly Financial Highlights: Q2 2025 vs. Q2 2024

In the second quarter of 2025, PETRONAS Chemicals Group Berhad navigated a tough market environment, which is evident in its key financial metrics when compared to the corresponding quarter in 2024.

• Revenue: The Group recorded a revenue of RM6.4 billion, a 17% decrease from RM7.7 billion in Q2 2024. This decline was primarily attributed to lower sales volume, the strengthening of the Ringgit Malaysia against the US Dollar, and softer product prices.
• EBITDA: Earnings Before Interest, Taxation, Depreciation, and Amortisation (EBITDA) stood at RM395 million, a 64% drop from RM1.1 billion in the previous year. The reduction was mainly caused by lower product spreads and a reduced contribution from a joint operation entity.
• (Loss)/Profit After Tax: The Group posted a loss after tax of RM1.0 billion, a stark contrast to the RM809 million profit recorded in Q2 2024. This was influenced by lower EBITDA, an impairment of assets at Perstorp, and higher unrealised foreign exchange losses.

The Group’s overall plant utilisation rate was lower at 77% compared to 89% in the corresponding quarter, a result of feedstock supply disruption at PC Fertiliser Kedah and increased plant maintenance activities. Such operational factors are critical in a high-volume industry and have a direct impact on financial outcomes.

Cumulative Performance: First Half of 2025

Looking at the performance for the first six months of the year, the trend reflects the challenges seen in the second quarter.

• Revenue: Cumulative revenue for the first half of 2025 was RM14.1 billion, down 7% from RM15.2 billion in the same period of 2024.
• EBITDA: Cumulative EBITDA fell by 43% to RM1.3 billion from RM2.3 billion in the first half of 2024, driven by lower product spreads.
• (Loss)/Profit After Tax: The Group recorded a cumulative loss after tax of RM1.0 billion, a significant shift from the RM1.5 billion profit in the corresponding period last year. This was attributed to lower EBITDA, asset impairment at Perstorp, and unfavorable foreign exchange impacts.

Segment Performance Breakdown

A closer look at the individual segments provides a clearer picture of the Group’s operational landscape. The performance across different business units varied, reflecting their unique market exposures and operational challenges during the quarter.

Olefins and Derivatives

The Olefins and Derivatives segment, a key contributor to the group, faced considerable pressure. The segment’s performance is often a barometer for industrial activity, and the current results reflect broader trends in manufacturing and consumption. Plant utilisation was down to 86% from 94% in Q2 2024 due to higher maintenance activities. Revenue declined by 30% to RM2.6 billion, driven by lower product prices and sales volumes. Consequently, the segment recorded a loss after tax of RM671 million, compared to a profit of RM458 million in the prior year’s quarter.

Fertilisers and Methanol

This segment demonstrated resilience in its top line, with revenue increasing by 6% to RM2.3 billion, primarily due to higher product prices. Despite operational setbacks, including feedstock supply disruption at PC Fertiliser Kedah which lowered plant utilisation to 73%, the rise in revenue suggests resilient pricing power. However, profitability was impacted, with EBITDA falling 23% to RM556 million and profit after tax declining by 33% to RM307 million, mainly due to lower product spreads.

Specialties

The Specialties segment is navigating a difficult period, focusing on optimizing its portfolio and managing costs. Revenue for the quarter was down 17% to RM1.5 billion, driven by lower sales volume. Despite this, EBITDA saw a 28% increase to RM153 million, partly due to income from the sale of emission rights. However, the segment reported a loss after tax of RM302 million, largely resulting from an impairment of assets at Perstorp amounting to RM431 million.

Financial Position and Cash Flow Analysis

A strong balance sheet remains a cornerstone of the company’s strategy, providing resilience in a volatile market. As of June 30, 2025, the Group’s financial position remained robust despite the challenging quarter.

• Total Assets: Total assets stood at RM58.8 billion, a slight 2% decrease from RM60.0 billion at the end of 2024. This was mainly due to the impairment of property, plant and equipment and currency effects.
• Total Equity: Total equity was reported at RM39.3 billion, with net assets per share at RM4.73.
• Cash Flow: Net cash generated from operating activities was RM1.3 billion for the first half of the year, a decrease from RM1.6 billion in the corresponding period of 2024, reflecting movements in working capital. Managing working capital effectively is critical, and the company’s cash flow performance will be closely watched by analysts in the upcoming quarters.

Management Outlook and Dividend Declaration

Looking ahead, the group’s strategy appears to be one of cautious optimism, balancing operational efficiency with a realistic view of global market dynamics. Management anticipates that product prices for olefins and derivatives will remain soft amidst balanced supply. In contrast, fertiliser and methanol product prices are forecasted to be firm, supported by seasonal demand and stable supply. For the specialties segment, the Group remains cautious, anticipating persistent demand uncertainty across most end markets.

The company continues to focus on its operational excellence programs to maintain high plant utilisation levels. In a sign of confidence in its long-term stability, the Board of Directors declared a first interim single-tier dividend of 3 sen per ordinary share for the financial year ending December 31, 2025, payable in September 2025.