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Business

Petronas Chemicals' Q2 net profit doubles

Malaysian group credits new plant and higher oil prices

KUALA LUMPUR -- Petronas Chemicals Group said its second-quarter net profit rose 108% on the year, to 964 million ringgit ($225 million), thanks to a new plant and rebounding crude oil prices.

Revenue for the April-June period climbed 24% to 3.96 billion ringgit, the group said in a stock exchange filing on Thursday. The company pointed to contributions from a new ammonia and urea factory that came onstream in Sabah in May.

On a segment basis, sales of olefins and derivatives used in products including plastics and fibers grew by 19%, to 2.5 billion ringgit, aided by a 6% increase in average product prices. Revenue from fertilizers and the methanol business increased by a third, to 1.4 billion ringgit, largely due to the combination of the new plant, higher prices and a stronger dollar.

Petronas Chemicals achieved a 90% plant utilization rate during the quarter.

In the first half of 2017, net profit expanded 114% to 2.2 billion ringgit on revenue of 8.65 billion ringgit.

The group, which is 64% controlled by state oil company Petroliam Nasional, expects the olefins and derivatives market to strengthen in the "near term," amid tighter supplies stemming from scheduled turnarounds and restocking demand.

On the other hand, it anticipates "bearish" demand for fertilizers due to oversupply.

Petronas Chemicals shares ended Thursday up 0.28%, at 7 ringgit, while the benchmark FTSE Bursa Malaysia KLCI closed down 0.01%.

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