KUALA LUMPUR (Aug 25): Hengyuan Refining Co Bhd’s net profit dropped 20.87% to RM84.41 million in the second quarter ended June 30, 2017, from RM106.67 million a year earlier, on maintenance expenses and amortisation charges.
The group, formerly known as Shell Refining Co (Federation of Malaya) Bhd, said foreign exchange losses and higher financing costs had also contributed to the decline in profit.
Meanwhile, revenue for the quarter rose 29.81% to RM2.6 billion from RM2 billion previously on the back of a 15% increase in prices for market traded refined product and additional sales of 330,000 barrels.
“These were complemented by lower unplanned downtime while the plant underwent a minor turnaround for its smaller crude distiller and a relatively stronger US dollar against ringgit,” the group said in a filing with the stock exchange today.
For the first half of the year, the group’s net profit rose to RM363.89 million, from RM208.32 million in the prior corresponding period, due to higher gross profit and lower administrative costs, which were offset by the minor turnaround maintenance costs, software subscription charges, higher finance costs and additional amortisation.
Revenue rose 43% to RM5.53 billion from RM3.87 billion due to higher average product market prices and a stronger dollar.
Going forward, Hengyuan said operational efficiency, product quality, hydrocarbon and financial risk management continue to remain key areas of focus in optimising its performance.
Shares in Hengyuan closed down 12 sen at RM8.12, giving it a market capitalisation of RM2.39 billion.