Chandra Asri Net Profit was Down 42.9%
Global uncertainty makes the performance of Chandra Asri Petrochemical, Tbk (TPIA IJ) is depressed. Through the year 2018, TPIA net profits were down 42.9% to USD181.65Mn of the previous year’s USD318.62Mn. Meanwhile, net income grew only 5.16% throughout the year 2018 to USD2.54Bn.
President Director of Chandra Asri Petrochemical, Erwin Ciputra, reveals the year 2018 is a year full of challenges amidst the global economic slowdown due to the rise in interest rates, the US-China trade war, geopolitical tensions, and oil prices and raw materials that are unstable, it would make the petrochemical margin becomes moderate.
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However, he said, it still registered an increase in revenue as swept up in the average selling price is higher especially ethylene, polyethylene and polypropylene. “Partially offset by lower sales volume mainly due to scheduled operations to plant debottlenecking butadiene, revamp furnace cracker and Tunaround Maintenance (TAM) Styrene Monomer factory, “he said on Thursday (28/3).
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Income of the TPIA is sustained by a growing segment of the polyolefins 25.6% YoY to USD1.18Bn. The segment of butadiene also rises 18.4% YoY to USD205.7Mn. Rent tanks and dock segments join rose 16.7% YoY to USD8.6Mn. While olefins segment recorded down 6.3% YoY to USD733.7Mn at the end of 2018. The segment of styrene monomer is also down 5% YoY to USD411Mn.
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According to Erwin, the decrease in sales volume of TPIA, because there is a planned Butadiene factory shutdown (90-days for the TAM and the tie-in work for debottlenecking), plant capacity increase of 37% to 137 KTA. then there is the scheduled operations to revamp furnace (2 furnace capacity creep) and styrene monomer factory TAM (2 train). “As a result, the operating rate of 96%, reaching a cracker is lower than the 99% of 2017, butadiene plant operated at a rate of 79% compared to 2017 reached 117% styrene monomer plant and operates at the level of 89% compared to 2017 to reach 105%. While for the plant operated at a maximum level of polyolefins, “he added.
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Based on TPIA financial statements already audited 2018 released today, cost of revenue also rose 14.90% YoY for USD2.15Bn at the end of 2018. Erwin said, the increase is caused by the cost of raw materials, especially the rising naphtha with an average price of USD650 per metric ton (MT) from USD500 per metric ton all 2018, reflecting a brent oil price rising US USD72 per barrel of USD54 per barrel. As for the cost of good sold (COGS), down 8.55% YoY to USD38.75Mn, and general and administrative expense of USD36.98Mn.
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TPIA also notes the increase in the financial expense of 42.31% YoY to USD51.28Mn in 2018. Losses on derivative financial instruments of USD4.79Mn from the previous USD1.21Mn in 2017. It also doubled the TPIA foreign exchange rate loss of USD8.05Mn or a significant rise from the previous year’s USD2.57Mn.
EBITDA also fell 27% to USD401.7Mn in 2018 from USD550.3Bn in 2017. “Primarily due to lower sales volumes plus a margin of lower petrochemical and chemical margins driven as well as rising prices of crude oil, “says Erwin. Total assets at the end of 2018 TPIA USD3.17Bn or rose 6.23% YoY. With liability and equity each of USD1.40Bn and USD1.77Bn.
