Petronas Chemicals Faces Losses, Plant Turnarounds Amidst Challenging Market
Petronas Chemicals Bhd (PetChem) reported significant FY25 losses, driven by its Pengerang Petrochemical Company and unfavorable foreign exchange. The company faces a weak near-term outlook due to depressed polyolefin prices and scheduled plant turnarounds in 2026, which will impact utilization. Its specialty division also struggles with margin pressure and slower recovery. Despite industry oversupply and demand uncertainty, PetChem is focusing on operational efficiency to navigate challenges, though analysts have cut FY26 forecasts.
Petronas Chemicals Bhd (PetChem) experienced substantial financial setbacks, recording a RM237 million loss in 4QFY25 and a full-year core loss of RM534 million for FY25. This performance fell below analyst expectations, primarily due to persistent losses from its Pengerang Petrochemical Company (PPC) and negative foreign exchange impacts. Compared to the previous year, FY25 marked a loss-making period, with PPC overheads fully recognized and weak polyolefin prices outweighing gains in fertilizers and methanol. The near-term earnings outlook for PetChem remains weak, as polyolefin prices continue to be depressed. Further complicating the picture are significant plant turnarounds scheduled for 2026. Asean Bintulu Fertiliser and the Kertih Complex will undergo maintenance in April 2026, followed by PC Fertiliser Kedah and Methanol Labuan in 3Q26, all of which will lead to reduced plant utilization. PetChem's specialty division is also under pressure, struggling with weakening product margins due to intense Asian competition in personal care and coating solutions, alongside lower silicone selling prices and sales volumes. Analysts anticipate a longer-than-expected recovery for this segment, leading to revised and significantly cut FY26 earnings forecasts. Despite the challenging operating environment marked by global oversupply, subdued demand, and weak product spreads, PetChem is focusing on maintaining high plant utilization and operational efficiency to navigate the market uncertainties.
