Petronas starts 2017 with solid 1Q performance

KUCHING: Petroliam Nasional Bhd (Petronas) ended the first quarter of 2017 with marked improvements, recording an increase in profit after tax (PAT) of more than 100 per cent from the corresponding period last year.

This was primarily driven by higher oil prices and improved margins from Upstream and Downstream businesses in tandem with PETRONAS’ on-going transformation efforts, it said in a statement yesterday. PAT for the quarter ended March 31, 2017 registered at RM10.3 billion compared to RM4.6 billion in the same period last year.

“The increase was mainly contributed by higher revenue for the quarter which benefitted from higher average realised prices and lower net impairment on assets, partially offset by higher taxation, amortisation of oil and gas properties and product costs,” it detailled.

Revenue grew by 25 per cent to RM61.6 billion from RM49.1 billion recorded in the same quarter of 2016. Petronas said the increase was due to higher average realised prices recorded across all products, exchange rate impact and higher processed gas sales volume.

This was partially offset by lower crude oil and condensate and petroleum product sales volume. Earnings before interest, tax, depreciation and amortisation ( EBITDA) increased by RM9.0 billion or 58 per cent to RM24.6 billion compared to RM15.6 billion in the corresponding quarter last year. The group’s cash flows from operations also grew by 86 per cent compared to the corresponding quarter last year to RM18 billion, as a result of higher average realised prices.

Meanwhile, internal efforts to reduce cost and improve efficiency continued to allow Petronas to reduce controllable operating expenditure (OPEX) from RM11.4 billion to RM11.1 billion. Total assets decreased to RM602.1 billion as at March 31, 2017 from RM603.3 billion recorded as at December 31, 2016 as a result of a stronger ringgit against the US dollar.

Meanwhile, shareholders’ equity increased to RM386.9 billion as at March 31, 2017 from RM380.3 billion as at December 31, 2016, contributed by profit generated during the period.

Capital investments in the first quarter of 2017 totaled RM11.9 billion, mainly attributable to the Refinery and Petrochemical Integrated Development (RAPID) project in Johor.

The group continues to maintain a conservative outlook for the remainder of 2017 despite the positive results as supply and demand balances are still slow to return to a sustained equilibrium. “Petronas will focus on its groupwide efforts to optimise costs, further improve efficiency and operational excellence through strategic collaborations within the industry.”