Petronas’ net profit jumps four­fold in Q3

> Surges to RM6.1 bil­lion on lower prod­uct and pro­duc­tion costs, favourable for­eign ex­change and lower net as­set im­pair­ments

The Sun (Malaysia) - - SPEAK UP -

PETAL­ING JAYA: Petro­liam Na­sional Bhd (Petronas) saw its net profit surge more than four­fold to RM6.1 bil­lion for the third quar­ter ended Sept 30, 2016 against RM1.35 bil­lion in the pre­vi­ous cor­re­spond­ing pe­riod, due to lower prod­uct and pro­duc­tion costs, favourable for­eign ex­change and lower net im­pair­ment on as­sets.

Rev­enue for the quar­ter un­der re­view fell 18.9% to RM48.74 bil­lion from RM60.06 bil­lion.

For the first nine months of the year, how­ever, Petronas’ net profit dropped 48.6% to RM12.25 bil­lion from RM23.82 bil­lion on the back of a 22% de­cline in rev­enue to RM146.31 bil­lion from RM187.56 bil­lion. This was mainly due to the down­ward trend of global crude oil prices, higher net im­pair­ment on as­sets and well costs as well as lower sales vol­ume of petroleum prod­ucts, crude oil and con­den­sates and pro­cessed gas.

Third-quar­ter net profit for its up­stream busi­ness came in at RM2.4 bil­lion, a 24-fold jump from RM100 mil­lion in the same pe­riod last year, while the down­stream op­er­a­tion re­ported a 19-fold leap to RM1.9 bil­lion from RM100 mil­lion, driven by higher re­fin­ing mar­gins.

The state-owned oil ma­jor said in a state­ment yes­ter­day that its year-to­date cash flows from op­er­at­ing ac­tiv­i­ties de­creased 29% to RM36.1 bil­lion from RM51.2 bil­lion, due to lower rev­enue as a re­sult of the down­ward trend of prices.

Nonethe­less, its ef­forts to lower cost re­sulted in a 9% de­cline in year-to-date con­trol­lable cost to RM30.7 bil­lion com­pared with RM33.9 bil­lion in the cor­re­spond­ing pe­riod last year.

Petronas’ to­tal as­sets de­creased to RM581.3 bil­lion as at Sept 30, 2016 from RM591.9 bil­lion as at Dec 31, 2015, pri­mar­ily due to the div­i­dend pay­ment to date of RM12 bil­lion in re­spect of the fi­nan­cial year ended Dec 31, 2015 and move­ment in for­eign cur­rency trans­la­tion re­serves.

The group’s cap­i­tal in­vest­ments as at Sept 30, 2016 to­talled RM35.9 bil­lion, at­trib­uted mainly to the Re­fin­ery and Petro­chem­i­cal In­te­grated De­vel­op­ment (Rapid) project in Jo­hor, do­mes­tic up­stream cap­i­tal ex­pen­di­ture and the Sabah Am­mo­nia Urea project.

Com­ment­ing on the prospects, Petronas said the cur­rent oil price en­vi­ron­ment con­tin­ues to pose sig­nif­i­cant chal­lenges to the in­dus­try and the out­look re­mains un­cer­tain.

“While per­for­mance in 2016 is af­fected, Petronas has been re­spon­sive with strong op­er­a­tional ef­fi­ciency and fi­nan­cial dis­ci­pline,” it noted.

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