Petronas Chemicals to go ahead with US$1.5b Sabah urea project

KUALA LUMPUR: Petronas Chemicals Bhd will go ahead with its US$1.5 billion Sabah ammonia urea project which will have urea capacity of 1.2 million tonnes per annum.

It said on Thursday, June 30 the plant would be built on 166 acres in the Sipitang industrial park in Sabah. The RM1.5 billion development cost would be financed from internal cash reserves and external borrowings.

Petronas Chemicals said a special purpose vehicle would undertake the project and work is expected to start in the second quarter of 2012 and commissioning in 2015.

It said the new plant supported its strategy to expand its production capacity and would provide it opportunities to further capitalise on its strengths and marketing position in Asia Pacific.

Read The Edge

Petronas Chem on acquisition trail

Kertih: Petronas Chemicals Group Bhd, which has a war chest of RM8 billion, is eyeing strategic acquisitions in the country and the region to consolidate its position as one of Southeast Asia's largest integrated petrochemical producers.

Petronas Chemicals president and chief executive officer Dr Abd Hapiz Abdullah said the expansion plan will be selective and synergistic as well as add growth, value and competitiveness to the group.

"The selective acquisition could be in the setting up of a new plant, joint ventures or buying stakes in other firms.

"We are talking with several parties right now but they are at a very preliminary stage.

"Rest assured, this is part of our reinforced commitment and strategy to grow our business," Abd Hapiz told some ten visiting jounalists here at its sprawling 5,000ha complex on Thursday.

Abd Hapiz said Petronas Chemicals is flexible when it comes to holding discussions but it will all depend on how to set objectives on growing its business.

"Sitting on a big cash pile helps a little bit on how you look at growing the business. We are going to have selective opportunity acquisitions in the future," he said.

Petronas Chemicals is the chemical arm of national oil and gas corporation Petroliam Nasional Bhd (Petronas).

The group floated its shares on Bursa Malaysia last November, raising RM12.8 billion which is Southeast Asia's largest initital public offering to date.

Established in 1985, Petronas Chemicals has 22 subsidiaries. They comprise wholly-owned and partly-owned subsidiaries, joint ventures and associate companies which it has been forging in the past 26 years.

These include its US$660 million (RM1.99 billion) purchase of Optimal group of companies in 2009 from US-based Dow Chemical Co, the world's oldest chemical company.

Last year, Petronas Chemicals bought UK-based BP plc's 15 per cent stake and 60 per cent interest in Ethylene Malaysia Sdn Bhd and Polyethylene Malaysia Sdn Bhd, respectively, for a combined US$363 million (RM101 billion) cash.

Petronas Chemicals chief financial officer Wan Shamilah Saidi said the group was able to make both purchases in a timely and quick manner without going to the market to raise funds.

The group has no firm plans and a timeframe on its selective opportunistic acquisitions.

After the listing, Petronas Chemicals is a 64.4 per cent subsidiary of Petronas with a market capitalisation of over RM47 billion.

It is one of Bursa Malaysia's top 15 companies and a component of the FTSE Bursa Malaysia Kuala Lumpur Composite Index.

Read more: Petronas Chem on acquisition trail

Petronas Chemicals 4Q net profit up 5.7% to RM932m, proposes RM1.52b dividends

KUALA LUMPUR: Petronas Chemicals Group Bhd reported net profit of RM932 million in the fourth quarter ended March 31, 2011, an increase of 5.7% from the RM881 million a year ago.

It said on Thursday, May 26 that revenue rose 8.9% to RM4.353 billion from RM3.996 billion while earnings per share were 12 sen. It proposed dividend of 19 sen per share totaling RM1.52 billion.

“The increase was achieved on the back of higher realised prices across most petrochemical products. Overall, the group’s production volume was lower due to maintenance activities during the current quarter,” it said.

Petronas Chemicals said the group’s operating profit declined slightly by RM96 million due principally to costs incurred for maintenance activities in the current quarter. The impact of higher cost was however offset by lower tax expense and higher share of profits from associates and jointly controlled entities.

For the financial year ended March 31, its net profit increased by 36.1% to RM2.994 billion from RM2.199 billion. Revenue rose 19.5% to RM14.586 billion from RM12.203 billion supported by higher prices and volume addition contributed by its acquisitions, Optimal Chemicals (Malaysia) Sdn Bhd and Optimal Glycols (Malaysia) Sdn. Bhd.

“The group achieved operating profit of RM3.7 billion, an increase of RM405 million (12%) from previous year.

“The group's results were further supported by the strong performance of BASF Petronas Chemicals Sdn. Bhd., which primarily contributed towards higher share of profits from associate and jointly controlled entities by RM533 million,” it said.

The group's EBITDA was at RM4.677 billion, up 23% or RM875 million from a year ago.

Read it in The Edge

Pengerang oil and gas complex to benefit Petronas Chemicals

PETALING JAYA: Petronas Chemicals Group Bhd will undoubtedly benefit from parent company Petroliam Nasional Bhd's (Petronas) plan to build a US$20bil integrated downstream oil and gas complex in Pengerang, Johor.

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The research house said Petronas Chemicals would report strong fourth-quarter earnings for the financial year ended March 31 (due to be out tomorrow), with a growth of 36% quarter-on-quarter and 34% year-on-year.

The better earnings will be driven by higher margins on all of its products, improved petrochemical product prices (owing to higher oil prices) and a smaller increase in costs, especially ethane cost which is relatively fixed due to contracts.

It maintains an “outperform” call on the stock and said the share price was likely to be re-rated for its strong earnings in the fourth quarter and improved fundamentals, both short term (due to higher oil price and rising volume) and long term (its expansion plans and industry margin improvement post-2011 due to the industry upcycle).

“The stock remains attractive, given its superior growth profile and profitability. We continue to apply a calendar year 2012 EV/EBITDA (enterprise value/earnings before interest, taxes, depreciation and amortisation) of 10 times to the stock, leading to an unchanged target price of RM10,” it said.

Read it in The Star

O&G counters advance ahead of Friday announcement of downstream project

PETALING JAYA: Oil and gas (O&G) stocks rose yesterday on the local bourse as several O&G service providers are expected to benefit from a multi-billion ringgit downstream project to be announced on Friday by the Government, and the gains in these stocks were also in line with the rise seen on the broader market.
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Dialog Group Bhd, which was up 14 sen to RM2.70 with a turnover of 13.4 million shares yesterday, stands to gain from the RAPID project as it gives better visibility to its proposed RM5bil independent deepwater petroleum terminal in Pengerang.

“Besides the tank terminal project, Dialog has the edge in providing engineering, procurement and construction (EPC) operations as well as specialist services and plant maintenance activities for this new complex given the proximity of its existing tank terminal project.

Read it in The Star

Dialog climbs to fresh highs, investors upbeat on prospects

KUALA LUMPUR: Shares of DIALOG GROUP BHD [] climbed to fresh highs of RM2.73 in late afternoon trade on Thursday, May 12 as investors were upbeat about its prospects.

At 4pm, Dialog was up three sen to Rm2.73 with 12.71 million shares done.

The FBM KLCI fell 1.88 points to 1,534.15. Turnover was 696.86 million shares valued at RM956.51 million. There were 250 gainers versus 447 losers and 279 stocks unchanged.

Petroliam Nasional Bhd is reported to be investing up to RM50 billion in new integrated downstream project to expand its business and further spur the growth of Malaysia’s oil and gas downstream sector.

The signing ceremony is expected to be done on Friday.

Then project would likely be the independent deepwater petroleum terminal project at Pengerang, Johor which is jointly undertaken by Dialog and Vopak.

Dialog and Vopak’s combined investment in the terminal would be RM5 billion and over a seven year period. Dialog’s investment would be RM2.5b of which 30% would be from equity and 70% from project financing.

Dialog and Vopak are the core facilitators for the project, which is viewed as an entry point project (EPP) under the government’s Economic Transformation Policy (ETP).

There are tremendous spinoffs opportunities from the Pengarang project and attract combined investments of another RM95 billion.

Read it in The Edge

Local fund style, in FULL control - Is it time for CHANGE next change?

Maybank IB Research keeps Petronas Chemicals (5183.KU) at Buy TP RM8.00

0631 GMT [Dow Jones] STOCK CALL: Maybank IB Research keeps Petronas Chemicals (5183.KU) at Buy with an unchanged target of MYR8.00, based on 14.4X 2011 PER.

The house says the petrochemicals producer may deliver a record profit in 2011, driven by higher demand, strong product margins and an increasing price divergence between natural products and synthetic alternatives. "High oil prices are beneficial as Petronas Chemicals' products track oil price increases with a 91% correlation," says Maybank.

In addition, as Japan is a major petrochemical producer (estimated 7.5% of Asia's total supply), "we think the earthquake and tsunami impact will cause shortages of supply which may support higher product prices," it adds. Maybank forecasts 2011E recurring net profit at MYR4.43 billion vs MYR2.94 billion in 2010. The stock is flat at MYR6.59.

Petronas Chem tipped to post strong Q3 results

Analysts have tipped strong third quarter financial results for Petronas Chemicals Group Bhd (PCG) (5183), one of Southeast Asia's largest petrochemicals producer, as it saw higher demand and margins for its products.

The subsidiary of national oil firm Petroliam Nasional Bhd may show a net profit of RM817 million, a 62 per cent increase from the previous quarter's RM510 million.

This was estimated by Wong Chew Hann, who tracks the stock at Maybank Investment Bank Research (MIB).

PCG, which was listed on Bursa Malaysia last November, is expected to release its maiden quarterly financial results this week.

"The drivers (for third quarter profit) are higher utilisation rates (more than 86 per cent), underpinned by strong global demand and higher product margins," Wong said in a report recently.

Product margins, which are the difference between the selling price of the product and raw material costs, have risen by 15 per cent from the second quarter.

Wong noted that product prices were higher due to a global commodity run, while raw material prices were fairly stable.

A fire that broke out at the group's aromatics plant in Kertih, Terengganu, on Christmas eve isn't likely to have hurt its results much, she said, adding that the 18-day plant closure may have resulted in a total economic loss of about RM6 million.

PCG's fourth quarter results may look even better as margins continue to rise on the back of higher commodity prices, she added.

Wong sees PCG making a net profit of RM3.2 billion for the full financial year (FY) ending March 31 2011 compared with RM2.2 billion in the previous year.

She maintained a "buy" recommendation on the stock with a target price of RM6.70. The stock last traded at RM6.21.

Credit Suisse, which initiated coverage on the stock last week, noted that its forecast for PCG's average annual growth rate for earnings, at 18.1 per cent for FY11 to FY13, is above the expected growth of PCG's regional peers, which stood at between 0.6 per cent and 8.5 per cent.

"Its earnings growth is expected to be driven by improving efficiency during FY11 to FY12, while the recovery of the ethylene cycle is expected to drive its earnings beyond 2012," the foreign research house said.

It rated the stock an "outperform" and pegged it at a RM7.50 target.

PCG is the largest petrochemical player in the Southeast Asian markets by market capitalisation and earnings.

Its initial public offering, which raised RM12.8 billion, was Southeast Asia's largest ever.

Read more: Petronas Chem tipped to post strong Q3 results

February 24, 2011 06:34 ET (11:34 GMT)

KUALA LUMPUR (Dow Jones)--Petronas Chemicals Group Bhd. (5183.KU) Thursday said its earnings in the third quarter more than doubled from a year earlier due to higher petrochemical product prices and following the acquisition of a new subsidiary.

The unit of national oil company Petroliam Nasional Bhd. said in a stock exchange filing that its net profit for the three months ended Dec. 31 rose to MYR874 million from MYR337 million. Revenue grew to MYR3.90 billion from MYR2.99 billion.

Petronas Chemicals said the better earnings were a result of petrochemical product price hikes which outstripped the increase in the group's feedstock costs. The growth was also supported by contributions from the recently acquired Polyethylene Malaysia as a wholly-owned subsidiary from September 2010, it added.

"The board expects the results of our operations for the financial year ending 31 March 2011 to be satisfactory," the company said.

For the nine-month period, net profit rose 57% to MYR2.06 billion from MYR1.32 billion a year earlier. The company said overall spreads between product prices and feedstock prices remained robust. "This resulted in operating profit of MYR2.5 billion, higher by MYR501 million, despite the inclusion of once-off negative goodwill of MYR175 million on acquisition of OPTIMAL Glycols (Malaysia) Sdn. Bhd. in the corresponding period," Petronas Chemicals said.

On a recurring income basis, the company said it registered an earnings before interest, tax, depreciation and amortization of MYR3.2 billion, compared to MYR2.3 billion a year earlier.

Revenue for the nine-month period increased to MYR10.23 billion from MYR8.21 billion.

Petronas Chemicals made its debut on the Malaysian stock exchange in November. The company raised MYR12.8 billion ($4.18 billion) through its initial public offering, making it the biggest ever IPO in Southeast Asia.

- By K.P. Lee, Dow Jones Newswires; (603) 2026 1233; kwan-por.lee@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=9DfGVtg1wsFEbYztWgizyQ%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires
February 24, 2011 06:34 ET (11:34 GMT)
Copyright (c) 2011 Dow Jones & Company, Inc.

Ambank Issues Eight New Call Warrants

Read more

PChem High Volume Closing Transaction - Why Ah???

"29 Dec 10, 12:30 PM

Master_B: i think they are goreng pchem very soon just b patient keep collecting......guys pchem going to be goreng very soon just in 3 working days ........pchem will be come at rm 6.80 trust me .....they purposely pushing down ........so tht they can buy more ......they dowan contra players to make money on this counter ...." - Bursa Chat

03.01.11

05.01.11

Note: PChem-CB listed today, no chart from Nexus yet. 

PChem, time for a prolong breakout?

20 Dec 10, 10:52 PM

newbie: after 26th Dec Pet Chem shall lead the rally of O&G sui sui

Petronas - BASF RM4b investment in the pipeline

By Kamarul Yunus

Petronas and BASF have signed a memorandum of understanding to undertake a joint feasibility study on building a specialty chemicals plant in Malaysia.

Petroliam Nasional Bhd (Petronas) and Germany's BASF are looking at jointly investing some RM4 billion to build a specialty chemicals plant of world-scale production capacity in Malaysia.

The two companies signed a memorandum of understanding in Kuala Lumpur yesterday to undertake a joint feasibility study on the project.

In a statement posted on its website, BASF said the two parties will evaluate the technical, commercial and economic viability of jointly owning and operating the world-scale facilities for the production of specialty chemicals, including non-ionic surfactants, methanesulfonic acid and iso-nonanol.

"The final scope of the investments will be determined following the outcome of the joint feasibility study, which is targeted to be completed in 2011," BASF said.

At the signing, Petronas was representend by its executive vice president of downstream business Datuk Wan Zulkiflee Wan Ariffin and vice president of downstream operations Kamaruddin Zakaria, while BASF was represented by its executive director responsible for Asia Pacific Dr Martin Brudermuller and Asia Pacific president Saori Duborg.

Commenting on the initiative, Wan Zulkiflee, who is also chairman of recently listed Petronas Chemicals Group Bhd, said the development of a new specialty chemical products portfolio is an important component of Petronas' plan to expand its downstream petrochemical business as part of its strategy to be a key player in the region as well as to spur domestic investments in the oil, gas and petrochemical industries.

Brudermuller said with the rapid growth of chemical markets in Asia Pacific, BASF is further expanding its specialty chemical business.

"Our joint venture with Petronas, based on a long-standing and successful partnership, is an excellent, well-established and competitive production platform in Asia.

By expanding our local production base in Malaysia, we can further improve our ability to supply our customers in Asia, from Asia,” he said.

BASF said based on its Asia Pacific strategy 2020, the company intends to produce 70 per cent of Asia Pacific sales in the region, with investments of about e2 billion (RM8.38 billion) between 2009 and 2013.

“The proposed move by Petronas and BASF will build on their successful strategic partnership in the country, established in 1997,” it said.

The partnership, via BAS Petronas Chemicals Sdn Bhd, of which BASF owns a 60 per cent stake, currently own and operate an integrated complex in Gebeng, Pahang, that produces acrylic monomers, oxo products and butane-
diol.

As for the subsequent phase of the collaboration, Petronas Chemicals Group and BASF will jointly evaluate outcome of the joint feasibility study and will adopt it as part of their strategic growth plans, if technically and commercially viable.

Read more: Petronas-BASF RM4b investment in the pipeline

20 Dec 10, 10:52 PM

newbie: after 26th Dec Pet Chem shall lead the rally of O&G sui sui

Petronas Chems' Listing Today

Petronas Chemicals' big debut

By Goh Thean Eu

Petronas Chemicals Group Bhd, a Petroliam Nasional Bhd (Petronas) subsidiary, will be listed on November 26 in what will potentially be the biggest initial public offering (IPO) in Southeast Asia, valued at over RM12.5 billion.

The IPO involves 2.48 billion shares, or 31 per cent of Petronas Chemicals' enlarged share capital, according to its listing prospectus published yesterday.

The exercise includes an offer for sale of 1.78 billion shares and issuance of 700 million new shares. More than 10 per cent, or 293 million of the IPO shares, are being offered to retail investors at RM5.05 each.

The price for institutional investors is being fixed via a bookbuilding, with the bidding price starting at RM4.50, sources said.

The share sale is set to be the biggest in the region, at least in recent times. It will surpass the US$2.7 billion (RM8.4 billion) raised by Global Logistic Properties Ltd in Singapore last month and the US$3.3 billion (RM10.2 billion) raised by Maxis Bhd last year.

Petronas Chemicals expects to generate some RM3.54 billion proceeds from the 700 million new shares, the prospectus noted.

Almost two-thirds of the proceeds, or RM2.24 billion, will be used for business expansion and acquisitions in the next five years. About one-third, or RM1.2 billion, is for working capital over two years.

Petronas Chemicals' sales and profit have declined in the past two years. Its earnings eased 25.5 per cent to RM3.45 billion in the financial year ended March 31 2009, while revenue dropped 3.79 per cent to RM12.86 billion.

The following fiscal year, net profit fell 24.7 per cent to RM2.59 billion while sales slowed 1.3 per cent to RM12.2 billion.

Analysts, however, remained upbeat about response to the IPO. This was due partly to the strong interest shown in last week's listing of Malaysia Marine and Heavy Engineering Holdings Bhd, another Petronas outfit.

"I believe the IPO will generate good response from investors. First is that the company gets its gas feedstock from its parent, which may translate into better margins. This will help it to be profitable, even during bad years.

"Second is that it will be a composite index component stock. Investors just can't ignore that," said an analyst from a local brokerage, who declined to be named.

The analyst added that Petronas Chemicals' proposed dividend policy of giving half of its net profit back to shareholders would add to its appeal.

Most analysts and research heads are in a "blackout" phase currently as the investment banks they are working for are involved in the IPO. During this time, they are not allowed to issue research reports or comment on Petronas Chemicals.Signs are that the company is on the growth path again.

In the four months ended July 31 2010, its net profit jumped 59 per cent to RM938 million. Group revenue rose by almost 30 per cent to RM4.22 billion.

"It is a volatile business. You have good years and bad years. And when you are in good years, the profits are really, really good," said a research head.

Some analysts, however, were not entirely positive on the company.

"It is currently in a very tight spot. It is caught in between the supplier countries and consumer countries, whereby supplier countries like those in the Middle East and consumer countries like China are setting up their own petrochemical plants.

This has resulted in increased competition," said another analyst.

The principal adviser, managing underwriter and joint underwriter of the mega-IPO is CIMB Investment Bank Bhd, with 13 other local investment banks as joint underwriters.

The retail offering, which began yesterday, will end on November 9.

The institutional offering, which started on October 26, will end on November 12.

Price determination date and balloting will also be on November 12.

Read more: Petronas Chemicals

Petronas Chem IPO to raise up to $4.2 bln

Written by Reuters Tuesday, 26 October 2010 12:16

KUALA LUMPUR: Malaysia's Petronas Chemicals could raise as much as $4.2 billion in its IPO, the largest ever in Southeast Asia, with the unit of state oil giant Petronas setting a price range for the share issue, according to Reuters on Tuesday, Oct 26.

A term sheet obtained by Reuters showed the initial public offering will offer a maximum of 2.5 billion shares at a price range of 4.50-5.20 ringgit per share. At the high end of 5.20 ringgit ($1.68), the IPO will raise $4.2 billion.

Petronas Chemicals' IPO comes as strong liquidity, low interest rates and comparatively more attractive returns are driving a wave of multi-billion offerings in Asia.

AIA, the Asian life insurance arm of AIG, last week sold $17.9 billion in its Hong Kong float, becoming the world's third largest IPO.

And Singapore wealth fund GIC's logistics unit Global Logistic PROPERTIES [] last week listed after a $3 billion IPO.

The term sheet breaks the IPO down as follows: up to 2.2 billion shares for institutional investors and 293 million retail shares. An over-allotment option, or greenshoe, of 372 million shares has also been made available.

The Employees Provident Fund (EPF) and Kumpulan Wang Persaraan, which are both pension funds, will be cornerstone investors and have undertaken to take up 445 million shares at the final IPO price.

There is a six-month lock-up period for Petronas, the selling shareholder, and the cornerstone investors.

At 5.20 ringgit per share, Petronas Chemicals' price-to-earnings comes in at 15.5 times 2011 earnings and 12.9 times 2012 earnings. The closest peer, Thailand's PTT Chemicals, trades at 20 times forward PE, according to Thomson One data.

The market was divided about the attractiveness of the company's valuations, citing the inherent volatility of the petrochemicals business.

However, some analysts said that the "Petronas premium" -- the added value of having state oil firm Petronas as a parent company -- justified the premium.

Petronas Chemicals' IPO will exceed that of Maxis' last year, which raised $3.3 billion. It will also be bigger than the $647 million being raised by Malaysia Marine and Heavy Engineering, another Petronas-linked vehicle. - Reuters

Taken from here...