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KUALA LUMPUR: Petronas Chemicals Group Bhd
(PCG) said it will take a hit of RM232mil in the fourth quarter ending December 31 after it decided to close a joint venture plant in Gebeng, Pahang.
“The Board approved the cessation of the butanediol complex (BDO) by a group joint venture, BASF PETRONAS Chemicals Sdn Bhd (BPC) as part of the portfolio realignment,” the company said in a document filed today with Bursa Malaysia.
As a result, BPC will record a one-time charge estimated at US $ 139 thousand (RM577 thousand) in the fourth quarter of 2020.
The amount corresponds mainly to write-offs, impairments, provision for dismantling, dismantling and compensation of personnel.
“With a 40% stake from PCG, the estimated financial implication for PCG is US $ 56 million (RM232 thousand),” he said.
The BDO complex began operations in 2004 with a nominal capacity of 100,000 metric tons per year.
It manufactures and sells three key products, namely butanediol, tetrahydrofuran, and gamma-butyrolactone, which are versatile intermediates used in the chemical industry.
It is used primarily in the manufacture of engineering plastics.
“BPC will close its BDO plant in Kuantan, Malaysia, in March 2021,” PCG said, adding that the shutdown “will not affect other plants within the facility.”
Meanwhile, in a separate filing, PCG said that it made a lower net profit of RM471 thousand in the third quarter ended September 30 compared to RM553 thousand registered a year ago.
The group said it posted a 90% higher plant utilization compared to 81% in the corresponding quarter, mainly due to lower level of legal turnover activities.
Consequently, production and sales volumes increased, but revenue decreased by RM212 million or 6% to RM3.5bil largely due to lower product prices.
EBITDA was comparable at RM914 thousand.
The lower after-tax profit, PCG said, was due to the foreign exchange loss from the revaluation of the shareholders’ credit to a joint operation company and the lower interest income generated by the placement of funds.
“The utilization of our production facilities depends on the maintenance activities of the plant and the sufficient availability of raw materials and supply of services,” PCG said of its outlook for the rest of the year.
“The Group anticipates that product prices will remain stable in line with current quarter product prices,” he said.
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