Thailand’s PTTGC Q1 net profit falls 57% on weak chemical margins

SINGAPORE (ICIS)–PTT Global Chemical’s first-quarter net profit declined by 57% year on year as chemical margins fell following spikes in feedstock costs, the Thai petrochemical major said on Wednesday.

in million baht (Bt)	Q1 2022	Q1 2021	% change
Sales revenue	175,554	101,864	72.3
EBITDA	10,588	16,404	(35.5)
EBITDA margin (%)	6%	16%	(10%)
Adjusted EBITDA	14,273	14,335	(0.4)
Net income	4,212	9,695	(56.6)

First-quarter revenues were up 72% year on year, on a combination of a crude-led increase in petrochemical prices and demand recovery as more countries continued to ease their COVID-19 restrictions.

Sales volume during the period increased “mainly from the volume realized after the completion of the Allnex acquisition” in the fourth quarter of last year, PTTGC said.

PTTGC completed the €4bn acquisition of Germany-based specialty chemicals maker Allnex at the end of December 2021.

Strong petrochemical prices in the first quarter were also driven by some tightening of supply due to turnarounds and a “slowdown in production of some producers in the region”.

For olefins, the adjusted EBITDA margins for the first quarter declined to 11% from 26% in the same period last year.

Olefins and derivatives’ adjusted EBITDA declined 38% year on year to Thai baht (Bt) 4.83bn ($140m), while aromatics incurred a loss of Bt1.11bn.

For the performance materials and chemicals business, first-quarter adjusted EBITDA grew 54% over the period to Bt6.34bn, largely due to the Allnex acquisition; while green chemicals’ earnings more than doubled to Bt730m.

PTTGC booked a loss of Bt8.57bn from commodity hedging, consisting of a realized loss of Bt2.57bn and an unrealized loss of about Bt6bn, the company said in the notes accompanying its Q1 financial results.

($1 = Bt34.62)

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