Petronas, Malaysia’s only Fortune 500 company and the largest source of government revenue and national export earnings, reported a net profit of 1.62 billion ringgit ($402 million) for the period, down from 11.07 billion a year ago.
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Malaysia’s state energy firm Petronas said Monday, August 22, profits plunged 85% in the second quarter due to low oil prices, adding to concerns about the country’s slowing economy. Revenue slid 21 percent to 48.4 billion ringgit.
“The first half of 2016 remained hard for Petronas”, chief executive officer Wan Zulkiflee Wan Ariffin told reporters in Kuala Lumpur.
This was further impacted by the lower sales volume of crude oil and condensate, processed gas and petroleum products.
The Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) was recorded at RM17.7 billion compared to RM 15.6 billion in the first quarter, while cash flows rose from RM9.7 billion to RM15.9 billion.
“However, volatile oil prices coupled with oversupply and lagging growth demand continued to impact the group’s half-year performance compared with the same period previous year”, he said at a press conference, here, yesterday.
“Until June, we have paid RM6 billion, (and) we will be paying the (RM10 billion) balance between now and November this year”, he said.
Petronas, Southeast Asia’s sole Fortune 500 company, said it had endured the commodity downtrend in the past two years “relatively well” but warned that uncertainties remained through 2017 due to a supply glut and weak demand.
The company’s upstream business logged a loss after tax of 3.7 billion ringgit in the second quarter, compared with a profit after tax of 6.2 billion ringgit in the corresponding quarter past year.
Additionally, the shareholder’s equity was recorded at RM351.6 billion, noticing a RM23.3 billion drop from last year’s RM374.9 billion on December 31- attributed to the approved RM16 billion year dividend for the financial year end for 2015 and the drop of the USD-MYR exchange rate. Petronas is sticking with its assumption for Brent to average $30 a barrel in 2016 for budget-planning purposes, Mr.
The company’s total liquefied natural gas (LNG) sales volume of 14.37 million tonne for the half year was lower than 14.96 million tonne in the previous corresponding period mainly from trading activities. This was offset by new volumes from Gladstone LNG facility in Australia.
The sales volume for petroleum products stands at 137.6 million barrels-a decrease from the last year’s 5.8 million barrels largely resulted from lower trade activities.
The oil major’s total production volume for Malaysia and worldwide operations was 2.39 MMboe/d, a slight increase compared to 2.33 MMboe/d in 1H 2015.
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Despite its revenue records for 2016 continue to be deeply impacted by the volatility in oil prices, Petronas reiterated that its financial position and liquidity are expected to remain strong.
