PTT Chemical's profit for the first quarter is expected to tumble by 39.5 per cent year on year to Bt2.233 billion because of plant shutdowns, according to reports from ACL Securities.

Since the beginning of the year, the company has shut down its Olexflex Unit-plant II for 22 days, its plant I4-1 for 67 days and its plant I4-2 for 40 days, for scheduled maintenance and de-bottlenecking.

Its production of olefin fell to 230,000 tonnes, a decrease of 43.1 per cent from the corresponding period last year. The lower production also affected its output of value-added products such as high-density polyethylene in the first quarter.

In addition, PTT Chemical's profit was lower because of a narrower spread between cost and yield for naphtha and high-value products. The global price for naphtha has risen 10.2 per cent from the end of last year, while the price of high-value products has not moved in that time.

However, ACL Securities believes the company's profit will be much higher in the current quarter due to improved production capacity.

This will rise from 1.5 million tonnes per year to nearly 1.7 million tonnes per year following the de-bottlenecking operation.

PTT Chemical's president and chief executive Aditheb Bisalbutr said production capacity in the final three quarters of the year would compensate for the loss of revenue and profit in the first quarter. However, it will also depend on global product prices.

There is a possibility the company will import ethylene to produce more downstream products near the end of the second quarter because of insufficient supplies and rising prices for high-density polyethylene.

However, it will not import propylene to produce downstream goods because of the low spread between cost and yield, he said.

ACL Securities predicts that the company's profit for the whole year will fall by 5.1 per cent from last year's Bt16.3 billion.

Chalida  Ekvitthayavechnukul

The Nation