A thorny final quarter — Petronas Chemicals may remain in the red.

(Kuala Lumpur, Jan 28)
After reporting losses for three consecutive quarters, analysts expect Petronas Chemicals Group (PCHEM, 5183) to post another weak set of results for 4QFY2025 (ended Dec 31), with net losses potentially widening further.

Galaxy Securities International cited lower product prices, higher foreign-exchange (FX) losses, and suboptimal plant utilization as key drags on earnings. The firm reiterated its “Reduce” call, arguing that the upcoming quarter could come in well below market expectations. PCHEM is scheduled to release its quarterly results on Feb 23.

Price weakness and FX losses in focus

Analysts warned that core net losses could exceed the previous quarter’s RM287 million. Key drivers include weaker pricing for polymers and monoethylene glycol (MEG), while urea prices also retreated from their higher levels seen in 3Q.
(MEG is a key feedstock used in polyester and PET plastic production.)

FX movements may further worsen reported earnings. Between end-September and end-December 2025, the U.S. dollar weakened about 3.5% against the ringgit, which could translate into roughly RM200 million in FX losses in 4Q, compared with RM74 million in the prior quarter.

Low utilization and oversupply keep 2026 challenging

Operationally, PCHEM’s Pengerang complex may also face constraints, with estimated utilization for its naphtha cracker at only 60%–70% (a “cracker” converts feedstock into base chemicals such as ethylene).

Looking into FY2026, the house expects continued global oversupply to keep polymer and MEG prices under pressure. Planned maintenance for the second ethane cracker in Kerteh in 2Q, alongside extended maintenance at Pengerang, could weigh further if utilization remains below optimal levels.

Galaxy Securities maintained its “Reduce” rating and a target price of RM2.94.