UpdateThai PTTGC Q1 net profit falls 12% on high feedstock costs

11 May 2012 05:48  [Source: ICIS news]

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PTT facility SINGAPORE (ICIS)--PTT Global Chemical’s (PTTGC) first-quarter net profit fell by 12% year on year to Thai baht (Bt) 9.85bn ($317m), weighed by high feedstock costs and waning overseas demand, the Thailand-based chemicals maker said late on Thursday.

The company’s revenues rose by 29% year on year to Bt133.7bn in the first three months of 2012, but earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 20% to Bt14.6bn, the company said in a statement.

Spikes in oil prices during the period translated to high energy costs, and drove up feedstock costs that led to higher prices of petroleum and petrochemical products, the company said.

Oil prices went up to a nine-month high in February and have continued to remain at elevated levels throughout the first quarter. Dubai crude oil prices increased by 16% year on year to average at $116/bbl in the March quarter, it said.

“However, concerns over the uncertainty of economic situation in Europe and US, along with the more cautious economic policy in China, led to softened demand and continuously put pressure on products spreads,” PTTGC said.

For its key product, high-density polyethylene (HDPE), the spread over naphtha declined to $374/tonne (€288/tonne) in the first quarter of 2012, from $469/tonne in the same period a year earlier, amid higher feedstock naphtha costs and lower demand from China, the firm said.

Naphtha prices were up 13% year on year to $1,021/tonne in the first quarter on the back on tight supply, it said.

Utilisation rate at the company’s HDPE business unit fell to 99% in the first quarter, compared with 105% in the same period a year earlier, because of a planned 20-day turnaround at a plant between 13 February and 3 March, the firm said.

Meanwhile, paraxylene’s price spread over condensate feedstock declined by 20% year on year to $556/tonne in the first quarter, while benzene’s price spread over the same feedstock fell by a steeper 39% to $175/tonne, the company said.

PTTGC is the petrochemicals flagship company of Thailand’s energy giant PTT.

($1 = Bt31.1, $1 = €0.77)

By: Nurluqman Suratman

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