Monday, 13 September 2010

Petronas Chem posts net profit of RM2.59bil

Economic conditions cause 25% drop in profit

Petronas Chemicals Group Bhd, which is headed for a listing on the Main Market this year, made an after tax profit of RM2.59bil for its fiscal year ended March 31, 25% lower than the RM3.45bil posted a year ago after the cyclical nature of the industry, economic conditions and higher feedstock costs affected earnings.

Revenue was also lower at RM12.2bil against RM12.37bil while after tax profit margins were 21.3% compared with 27.9% for 2009.

The group, controlled by state oil firm Petroliam Nasional Bhd (Petronas) had total assets of RM26.89bil as at March 31.

The figures were part of the information revealed in Petronas Chemicals’ draft prospectus which was posted on the Securities Com-mission (SC) website yesterday.

In the draft prospectus which will be available until Sept 29, petrochemicals producer Petronas Chemical did not state how much it aimed to raise in the initial public offering (IPO) but banking sources familiar with the company had valued it at some US$2bil, according to a newswire report.

“We intend to continue to explore growth opportunities that complement our products or markets, or enable us to gain footholds in countries where the Petronas Group already has oil and gas operations so that we can leverage on the group’s presence to develop vertically integrated operations in that market,” Petronas Chemicals said.

The company, a global market leader, added that it hoped to strategically increase its production capacity through enhancements to its existing facilities and potentially through investments in new facilities.

Upon the successful completion of the IPO, Petronas will continue to be the controlling shareholder of the company although it is not certain what the stake would be, according to information in the draft prospectus.

“For investors who want to participate in this industry, the presence of Petronas as a state-owned firm would give them some confidence,” Areca Capital Sdn Bhd fund manager Danny Wong said.

CIMB Investment Bank Bhd is the principal adviser, managing underwriter and retail underwriter for the IPO exercise.

The joint global coordinators and joint bookrunners are CIMB Investment Bank, Deutsche Bank AG, Hong Kong branch and Morgan Stanley & Co International plc.