BANGKOK, Feb. 28, 2019
BANGKOK, Feb. 28, 2019 /PRNewswire/ -- PTT Global Chemical Public Company Limited (GC) has announced its 2018 results, with a net profit of 40,069 million baht, the highest since the company was founded. The increase in profit is due to higher sales, more efficient production, returns business investment during the year, and the company achieving its goal of 10,800 million baht in benefits from its Project Max. GC will continue with its EEC investment projects while promoting the concept of Circular Living.
2018 performance highlights
Mr. Supattanapong Punmeechaow, President and Chief Executive of PTT Global Chemical Public Company Limited, or GC, said the company's 2018 performance is better than the previous year. Thanks to an increased average product price and sales that were up 18% to 515,449 million baht, profit from the company's overall operations increased 13% to 42,608 million baht, which excludes non-recurring item.
For GC's olefins business, polyolefins prices remained at a high level during the first nine months of 2018 due to the recovery of the phenol business, the increase in profit-sharing plans from the full-year Asset Injection project of shares that GC recently purchased, the recovery of the Acrylonitrile (AN) business, and the Project Max, which is improving GC's operational efficiency organization-wide. Project MAX is aimed to improve performance and organizational health in sustainable way. However, other factors including a decrease in inventory value due to a drop in oil prices during late 2018, as well as profits from a business acquisition of 1,355 million baht that were lower than the fair value, resulted in GC's net profit for 2018 amounting to 40,069 million baht (8.89 baht/share), an increase of 2% over 2017.
For the 4th quarter of 2018, GC's total sales revenue reached 128,874 million baht, an increase of 9% compared to the 4th quarter of 2017. However, lower crude oil prices resulted in a 6% decrease in profit compared to the 3rd quarter of 2018. Lower crude oil prices also led to a corresponding reduction in product prices, resulting in a Q4 profit of 9,076 million baht exclude non-recurring item, a 23% decrease from the 3rd quarter of 2018, and a 13% decrease compared to the 4th quarter of 2017. For the 4th quarter of 2018, GC had a net profit of 4,060 million baht, a decrease of 58% compared to the same quarter in 2017 and down 68% from the 3rd quarter of 2018. This decrease was largely due to an inventory loss of 6,524 million baht caused by a lower Dubai crude oil price, which declined from USD 74.28 per barrel in the 3rd quarter of 2018 to USD 67.42 per barrel in the 4th quarter of the year.
Summary of 2018 performance
Key strategies contributing to GC's 2019 performance
1) The Olefins Reconfiguration project will expand production capacity by investing in a naptha cracker, with an aim to add more value to GC's existing raw materials. The company considers this as bolstering its downstream business for the future with an ethylene production capacity of 500,000 tons and a propylene production capacity of 250,000 tons. Both production facilities are currently under construction and are expected to be in commercial operation by 2020.
2) The Propylene Oxide (PO) project, or Polyols project, will expand propylene products into downstream products in the polyurethane chain. This project is currently in construction process, with commercial operations expected to begin in 2020.
3) The PA9T and HSBC Advanced Engineered Products project was made possible with the collaboration of Japanese investors to establish Kuraray GC Advanced Materials Co., Ltd., a specialized chemical business. This project will produce advanced engineered products that will play a crucial role in driving GC's future business growth. Currently under construction, the plant is expected to begin commercial operations by 2022.
4) GC became share holder of Siam Mitsui PTA Co.,Ltd. (SMPC, which has been renamed to GCM-PTA) and Thai PET Resin Co., Ltd. (TPRC) with the capacity of 970,000 tons of PTA per year and 147,000 tons of PET per year, but will also add more value to paraxylene (PX) and monoethylene glycol (MEG) to meet the needs of customers in the packaging business. Also, an upturn in the PTA business resulted in GC being able to better manage its bottom line.