Petronas posts 26pc increase in net profit to RM13b in Q1

(The Straits Times) – Petroliam Nasional Bhd (Petronas) posted a 26 per cent increase in net profit to RM13 billion in its first quarter ended March 31, 2018, from RM10.3 billion in the corresponding quarter last year.

Petronas attributed this to higher revenue and net write-back on impairment.

The national oil company’s revenue grew by RM1.4 billion to RM57.9 billion from RM56.5 billion in the first quarter last year due to higher average realised prices recorded across all products. But this was largely offset by the effect of the strengthening of the ringgit against the US dollar.

President and chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin expects the group’s overall year-end performance to be “satisfactory”.

“Our encouraging performance in the first quarter of the year was attributed to our ongoing transformation efforts which focus on overall business improvement and operational excellence, coupled with a recovery in commodity prices.

“While oil prices have trended upwards, the industry must continue to be diligent in institutionalising the cost-effective discipline and the drive for efficiencies pursued over the past few years. This will ensure the sustainability of Malaysia’s oil and gas industry in the current competitive global landscape,” he said in a statement issued today.

Petronas’ earnings before interest, tax, depreciation and amortisation (EBITDA) grew two per cent to RM25.0 billion from RM24.6 billion in the corresponding quarter last year.

Cash flow from operations rose to RM21.9 billion, up 22 per cent from RM18.0 billion a year ago.

Its total assets seen decreased marginally to RM592.8 billion as at March 31 2018, from RM599.8 billion as at December 31, 2017 due to the impact of stronger ringgit against the dollar.

Shareholders’ equity of RM390.7 billion as at March 31, 2018 increased by RM0.9 billion from RM389.8 billion as at December 31, 2017. This was mainly contributed by profit generated during the period partially offset by the movements in foreign currency translation reserves.

Its gearing ratio of 16.2 per cent as at March 31, 2018 was slightly higher by 0.1 per cent compared to 16.1 per cent as at December 31, 2017.

Meanwhile, its return on average capital employed (ROACE) increased to 10.4 per cent, from 9.8 per cent previously in line with higher profit recorded.

The group’s capital investment during the quarter was RM12.0 billion, mainly attributable to the Refinery and Petrochemical Integrated Development roject in Johor.