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SINGAPORE (ICIS)--Thailand-based refiner and petrochemical producer IRPC will see continued strong earnings growth in the fourth quarter on the back of higher plant utilisation rates and crude oil prices, Thai brokerage Krungsri Securities said on Monday.
The company late on 3 November reported that its third-quarter net profit more than doubled to baht (Bt) 3.25bn ($98m) from Bt1.31bn in the same period last year.
IRPC’s sales for the September quarter rose by 24% year on year to Bt56.7bn, while earnings before interest, tax, depreciation and amortisation (EBITDA) more than doubled to Bt6.64bn, it said.
The petrochemical business improved in the third quarter, driven by a shortage of raw materials following the shutdowns seen in the aftermath of Hurricane Harvey as well as increasing demand, IRPC said in a filing to the Stock Exchange of Thailand.
Plant utilization rate at IRPC’s olefins business rose to 97% in the third quarter, up from 88% in the same period of 2016, while that of the aromatics and styrenics business group was at 104% compared with 80% in the same period of last year.
For the first nine months of this year, the company’s net profit slipped by 14.8% year on year to Bt6.84bn while sales were up 13.4% at Bt151.2bn.
In the fourth quarter, IRPC’s earnings will be supported by higher oil values, with Dubai crude oil prices touching highs not seen since July 2015 this past week, said Naphat Chantaraserekul, an analyst at Krungsri Securities.
The company is also resolving technical problems at its UHV (upstream project for hygiene and value-added products) unit, he said.
“So far, propylene output [at the UHV unit] has improved to 19.5% in the third quarter from 18% in the second quarter. This should be completed by end-2017,” Chantaraserekul said.
IRPC is also ramping up run rates at its new 160,000 tonnes/year polypropylene (PP) expansion project in Rayong province, as well as its 140,000 tonnes/year PP compound and specialties project at the site, he said.
Interactive by Nurluqman Suratman
($1 = Bt33.2)