Chandra Asri reports stronger first-half profit

IDX-listed PT Chandra Asri Petrochemical Tbk (CAP), Indonesia's largest integrated petrochemical company, said on Tuesday it recorded a net profit of US$66.4 million in the second quarter of this year (Q2-2017), continuing its robust performance to deliver net profit of $174.2 million for the six months period of 2017, some 32 percent higher year-on-year, reflecting continuing healthy product margins amid favorable supply/demand dynamics.

The company said in a statement that the performance for Q2-2017 was lower compared to Ql-2017 primarily due to seasonal decrease in sales during the Islamic festivity Lebaran period which occurred in June 2016 where the company typically experiences lower sales thereby affecting our gross profit.

However, with higher operating rates, CAP?s financial results for the first half of 2017 were better than first half of 2016 with net profit of $174.2 million compared with $131.8 million in 1H-2016 on the back of higher net revenues of $l,195.3 million compared to $882.1 million in 1H-2016.

The higher net revenues were largely contributed by higher sales volumes totaling 1,248 KT compared to 1,036 KT in 1H-2016 coupled with continuing healthy product margins, partially offset by an increase in feedstock costs, primarily naphtha, of some 24 percent to $486/ton. As a result, gross profit margin for 1H-2017 was 24.11 percent comparable with 24.7 percent for 1H 2016.

Similarly, 1H-2017 underlying earnings before interest, depreciation and amortization (EBITDA) increased significantly by 32 percent to $295.2 million from $224.0 million for the same period last year.

CAP's Director, Suryandi, stated in the statement that CAP's strategy of expansion to meet Indonesia's growing demand and vertical integration to add value along the petrochemical chain remains robust.

Suryandi is optimistic that for the rest of 2017 the company will be able to maintain its positive performance by focusing on high plant utilization, safe operations and optimization of our product portfolio.

Editing by Reiner Simanjuntak