Achieves historically-high net profit for the first nine months of the year and continues to achieve sustainable growth by embracing the concept of “Circular Living”
PTT Global Chemical Public Company Limited (GC) has released its operating results for the third quarter of 2018, reporting a net profit of 12,793 million baht and 136,712 million baht in sales revenue during the quarter, achieving a record-breaking net profit of 36,008 million baht for the first nine months of 2018, an increase of 21% over the same period in 2017. GC continues to drive sustainable growth in line with the concept of the Circular Economy both internally and externally. The company is also building social awareness that will lead to changing behavior regarding the more efficient use of resources which will, in turn, enable GC to reach its goal of becoming a model for sustainability.
Mr. Supattanapong Punmeechaow, President and CEO of PTT Global Chemical Public Company Limited (GC), said that the company's performance in the third quarter of 2018 improved from the previous quarter, generating sales revenue of 136,712 million baht, an increase of 6%. GC reported adjusted EBITDA of 16,830 million baht with a net profit of 12,793 million baht (2.84 baht/share) for the third quarter, a 6% and 18% increase respectively over the second quarter. Compared to the third quarter of 2017, the company reported a 31% increase in revenue with adjusted EBITDA and net profit up by 12% and 29% respectively. GC reported net profit of 36,008 million baht in the first nine months of 2018, a 21% increase over the same period in 2017, making this the highest profit level in the company's history.
During the third quarter, performance for GC's Olefins and Derivatives business decreased slightly compared to the same period in 2017. Sales volume for the Polymer business increased as a result of new LLDPE production capacity of 400,000 tons per year, which began commercial operations in March 2018 and realized additional depreciation since then, which negatively affected the bottom line of this business unit. The Ethylene Oxide business was affected by increasing feedstock costs. Compared with the second quarter of 2018, performance in the Olefins and Derivatives Business decreased slightly due to a reduction in the price of polyethylene and a reduction in the sales volume of ethylene, which was the result of scheduled maintenance at the Olefins 1 plant.
Operating performance for GC's Aromatics business increased significantly over the second quarter of 2018, mainly as a result of the paraxylene spread over condensate, and an increase in sales volume following a planned maintenance shutdown last year to improve production efficiency. GC's Petroleum business, which declined in the third quarter of 2017 as a result of a weakening in the product spread, improved in the second quarter of 2018, particularly fuel oil. The share of profit from investments increased significantly due to improved performance in GC's Acrylonitrile (AN) and PVC businesses, together with better performance for the company's Bio-plastics business, which operates through NatureWorks LLC in the United States.
Performance details by GC Business Unit include:
- The refinery operated at 102% capacity of the CDU unit.
- The aromatics plant operated at an average of 94% capacity of BTX utilization.
- The olefin plants operated at 98% capacity.
- The Polyethylene (PE) capacity utilization rate was 97%.
- The average HDPE price was at 1,350 USD/ton, an increase of 19% from Q3/2017.
Updates on GC's investment projects:
GC purchased 49% of shares in the UK's Revolve Group Limited (RGL) as part of a comprehensive investment plan and value-added approach to GC's products. The investment focuses on the performance chemical segment, in which RGL is a major Rotomolding compound manufacturer, and one of the top companies with a dominant market share in Europe. RGL has manufacturing facilities in several countries including the UK, Poland, Australia, New Zealand, and Malaysia.
As a key raw material for this project is GC's LLDPE, one of the company's polymer products, GC is making a significant effort to enter the construction sector, supplying raw materials used to make large-size buckets and tanks, and underground and on-ground water tanks. GC is also focusing on the sports sector, as LLDPE is used to manufacture kayaks and sailboats. The robustness and durability of LLDPE Rotomolding ensures that it is suitable for a wide range of large-sized plastic products.
Sustainable growth through "Circular Living"
Mr. Punmeechaow noted that GC operates based on the principles of the Circular Economy, both internally and externally, while building social awareness to help change people's behavior to encourage the more efficient use of resources. Most importantly, GC is committed to becoming a model for sustainability.
GC is also committed to conducting its operations with an emphasis on resource efficiency and environmental conservation, as a foundation for sustainable operations, more efficient manufacturing processes, lower consumption, improved waste management, and reduced environmental impact. This also involves applying Circular Economy principles to technological and biochemical improvements to reduce waste and environmental impact throughout GC's supply chain. This includes initiatives such as:
GC operates its business by applying the principles of the Circular Economy both inside and outside of the company, while at the same time increasing public awareness with a goal of changing behavior to maximize the value of resources. A priority for GC is to become a role model in encouraging lifestyles under the "Circular Living" concept.
GC's sustainable management practices cover four areas: resource management from upstream to downstream; production management using the "Three R's" (Reduce, Reuse, and Recycle), which it will expand into "Five R's" (Reduce, Reuse, Recycle, Renewables, and Refuse); efficient consumption; and effective waste management.
The company has a goal to reduce single-use plastics such as shopping bags, which currently amount to over 150,000 tons/year, to 0 tons/year in the next five years. GC is also focusing on bioplastics used to produce packaging in various forms. Another area of focus for GC is upcycling, applying innovations and creativity to add more value to products. This is also in line with the principles of the Circular Economy.
GC is also in the process of studying an investment in a world-class plastic recycling plant in the Rayong Industrial Estate that will meet international standards. Currently, the project is at the stage of selecting appropriate technologies, seeking potential joint venture partners, and establishing a waste collection system. GC expects to have a clear picture of this project by early next year.