Hengyuan Refining Company Is Poised for Growth
Hengyuan Refining Company Is Poised for Growth
Profit after tax increased by 175% quarter-on-quarter
New Independent Non-Executive Directors appointed to the Board.
KUALA LUMPUR, 24 May 2017 - Hengyuan Refining Company Berhad (HRC), formerly known as Shell Refining Company (Federation of Malaya) Berhad, today announced that it has recorded a profit after tax of RM279.5 million for the first quarter ended 31 March 2017.
This marked a significant 175% improvement compared to a profit after tax of RM101.7 million registered for the corresponding quarter last year. Earnings per share as at 31 March 2017 was also at 93.16 sen compared to 33.88 sen last year. The Company recorded revenue of RM2.9 billion for the financial period ended 31 March 2017, approximately 56% higher than the RM1.9 billion in the same period last year. This is primarily due to higher average product prices in the current period of USD65/barrel as compared to USD42/barrel in the same period last year. Sales volume in the current quarter is 10.1 million barrels, marginally lower than the 10.4 million barrels sold in same quarter of 2016.
The higher gross profit margin is due to improved average product cracks in the current period. The Company also recorded a net gain on foreign currency exposure, mainly on trade receivables as MYR gradually strengthened against the USD. Lower administrative expenses were offset by pre-turnaround maintenance costs, IT subscription charges, higher finance costs and additional amortization charges arising from new software/intellectual property assets capitalized towards the end of FY2016."
Maarten Stals, Managing Director and Executive Director of Hengyuan Refining Company Berhad, said, "HRC's increased profit after tax quarter on quarter came as a result of improved gross profit margin due to higher refining cracks during the period. We also benefited from a net gain on foreign currency exposure. These factors have collectively led to the significant jump in profit after tax quarter-on-quarter," he explained.
Commenting on the outlook for the current financial year, Stals said that refinery margins are expected to remain uncertain. "Operational efficiency, product quality and financial risk management will remain HRC's key focus in maximising margin opportunities throughout our 2017 financial year," he added.
HRC Board Welcomes New Independent Non-Executive Directors.
HRC also announced today that the Company has appointed two new Independent Non-Executive Directors to its Board, namely En. Alan Hamzah Sendut and Ms. Lim Tau Kien. The new appointments came following Dato' Seri Talaat bin Haji Husain's decision not to seek re-election after 9 years of service as an Independent Non-Executive Director. Current Independent Non-Executive Board Director, Mr. David Lau Nai Pek, has also decided not to seek re-election. Stals says, "We would like to thank Dato' Seri Talaat and David Lau warm heartedly for their valuable contributions to HRC in their years of directorship during which HRC realized the Hijau project in 2013 and transited to the current major shareholder. We wish them well and good fortune with their future endeavors." The new Independent Non-Executive Director, Alan Hamzah Sendut is a member of the Malaysian Institute of Accountants and a Chartered Accountant of the Institute of Chartered Accountants England and Wales. He comes with 34 years of finance and business experience across multiple industries. He has around 19 years of experience with the Sime Darby Group, his last role was Managing Director, Energy and Utilities (Non China) Division. He is currently an Independent Non-Executive Director of Hong Leong Islamic Bank Berhad. Lim Tau Kien is a Member of the Institute of Chartered Accountants of Scotland. She joined the Shell Group from 1983 - 2008 and held various senior finance positions over 25 years, her last role being the Country Chief Financial Officer, Finance Director and Country Controller of Shell China from 2004 to 2008. She is currently an Independent Non-Executive Director of Hong Leong Financial Group Berhad, Malaysian Pacific Industries Berhad, UEM Group Berhad and HLA Holdings Sdn Bhd.
About Hengyuan Refining Company Berhad
Hengyuan Refining Company Berhad (HRC), formerly known as Shell Refining Company (Federation of Malaya) Berhad (SRC), was incorporated in Malaysia on 19 September 1960. The company was listed on the Main Board of the then Kuala Lumpur Stock Exchange (now known as the Main Market of Bursa Securities) on 29 October 1962.
On 22 December 2016, Malaysia Hengyuan International Limited (MHIL) acquired 51.0% equity stake in SRC from Shell Overseas Holdings Limited for USD66.3 million. MHIL is wholly-owned by Heng Yuan Holdings Limited, which in turn, is a wholly-owned subsidiary of Shandong Hengyuan Petrochemical Company Limited..
Hengyuan Refining Company Berhad manages and operates a refinery in Port Dickson, Negeri Sembilan with licensed production capacity of 156,000-bpd. The refinery is involved in the refining and manufacturing of petroleum products, and provides employment for more than 500 individuals comprising of staff and contractors.
About Shandong Hengyuan Petrochemical Company Limited
Established in 1970, Shandong Hengyuan Petrochemical Company Limited (SHPC) is a state-owned enterprise based in Linyi County, Shandong Province, China. SHPC develops, produces, processes, and markets diesel oil, liquefied gas, propylene, propane, polypropylene, tert-butyl alcohol, oil slurry, asphalt, tert-pentene, ethybenzene, and other petroleum related products.
SHPC has total assets of 4 billion Yuan (approx. USD582.53 million) and employs 1,700 employees. SPHC is one of the Top 100 Leading Enterprises in Shandong and one of the Top 500 Chinese Chemical Enterprises. The Group has garnered multiple accolades over the years and its Chairman and General Manager, Wang Youde, has also received recognition including ‘One of Ten Outstanding Entrepreneurs in Shandong Province' and ‘Outstanding People Award of National Advancements in Productivity', amongst others.
This news release is issued on behalf of Hengyuan Refining Company Berhad by Acendus Communications Sdn Bhd. For further information, please call I-Mae at 012 383 5688 or Michael Poh at 012 395 5202.