KUALA LUMPUR: Petronas Chemicals Group Bhd's (PetChem) climbed in early trade Thursday after it reported better-than-expected financial results in the second quarter ended June 30.

       The counter advanced 3.68%, or 30 sen to RM8.45 with 2.3 million shares traded at 9.39am.

       PetChem posted its highest-ever quarterly earnings of RM1.86bil in the second quarter ended June 30, 2021, representing a nine-fold increase over the RM186mil recorded in the previous corresponding quarter on the back of crude oil price recovery.

       Its revenue was 76% higher year-on-year (y-o-y) to RM5.6bil due to the product prices growing in tandem with crude prices.

       PetChem announced an interim dividend payout of RM1.84bil or 23 sen per share, representing 55% of profit after tax for the first half of 2021.

       In the first half, PetChem posted a net profit of RM3.32bil on revenue of RM10.28bil.

       RHB Research said PetChem’s 1H21 core earnings of RM3.2bil came in above expectations, at 80% and 79% of the house and street full-year estimates.

       The research house has maintained its “buy” on PetChem with a target price of RM9.11.

       “We see further earnings upside, if the moderation in ASP is less steep than anticipated, and PetChem can kickstart the Pengerang Integrated Complex (PIC) project smoothly,” it said.

       “We believe PIC will incur minimal losses and only start contributing positively to earnings in 2022.

       “Plant utilisation stood at 94% in 1H21, and we expect 3Q21 utilisation to improve before higher turnaround plans in 4Q21. Overall, plant utilisation is still targeted at 93-94%,” it said.