Petronas posts lower FY2023 net profit amid reduction in average realised prices

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) posted a lower net profit of RM80.7 billion in the financial year ended Dec 31, 2023 (FY2023), compared to RM101.6 billion recorded in the preceding year, mainly impacted by lower average realised prices.

Revenue in FY2023 slipped to RM343.6 billion compared to RM372.3 billion previously, said Petronas president/group chief executive officer Tan Sri Tengku Muhammad Taufik Tengku Aziz in a statement.

“The low revenue was mainly due to lower average realised prices for all products in line with declining benchmark prices.

“This is partially offset by improved sales volumes, mainly from petroleum products and foreign exchange impact,” he said at the announcement of Petronas’ financial performance for FY2023 here, yesterday.

For the fourth quarter of FY2023, the national oil company’s net profit decreased to RM16.6 billion from RM24.4 billion, while revenue dropped to RM91.7 billion from RM104.2 billion previously.

Capital Investments amounted to RM52.8 billion in FY2023, mainly a ributed to upstream and gas projects.

Tengku Muhammad Taufik said the domestic capital expenditure increased by 41 per cent against FY2022 mainly for open investments in the Petronas near-shore floating liquefied natural gas (LNG) project in Sabah, and the Kasawari gas field development and carbon dioxide (CO2) sequestration facilities in Sarawak.

Total assets strengthened to RM773.3 billion as at Dec 31, 2023, while shareholders’ equity increased to RM443.5 billion as at Dec 31, 2023, primarily due to profit a ributable to shareholders, he said.

Adding on, Tengku Muhammad Taufik said Petronas would continue to uphold prudent financial management and discipline, as the group doubles down on emissions abatement in its core business and pursue cleaner energy solutions.

“We remain commi ed to executing our ‘Energy Transition Strategy’, even as we strive to ensure operational excellence. Delivering on both fronts will be crucial in order to continue growing the value of our integrated business portfolio.”

He said Petronas had developed a clear strategy for the energy transition.

“This strategy aims to ensure a balanced approach in offering emissions-abated solutions, while it lays the foundation for a new energy system.

“Across the group, we are making progress in meeting our near-term target of capping emissions at 49.5 million tCO2e (tonnes of CO2 equivalent) by 2024 in our domestic operations. As we look ahead, Petronas remains determined to continue improving our delivery as a progressive energy and solutions partner,” he said.

On outlook, Tengku Muhammad Taufik said the global economy entered 2024 on a weak footing following softer-than-expected economic performance towards the end of 2023, leading to cautious spending and investments by businesses and consumers.

“Amid these macroeconomic headwinds, the oil and gas markets face uncertainties due to slower global demand, while supply risks are heightened following increased geopolitical tensions in the Middle East and Europe.”

At the same time, the energy industry was experiencing a shift towards cleaner solutions.

Meanwhile, Tengku Muhammad Taufik said Petronas paid a total of RM40 billion in dividends to the government last year, with total dividend payout in 2022 reaching RM50 billion, he added.

“Having carefully and rigorously assessed the group’s affordability to continue to fund its operations, service its debts and meet its obligations as well as invest in growth, Petronas last year made the scheduled dividend payment of RM40 billion to the government.”

Petronas also held its commitment to the National Trust Fund with a contribution of RM2 billion last year.

Executive vice-president and group chief financial officer Liza Mustapha said Petronas would pay a total of RM32 billion in dividends to the government this year.

“The board has approved the dividend payment of RM22 billion, to be paid between April and December. It had just been approved yesterday (Thursday),” she said.