KUCHING: Petroliam Nasional Bhd (Petronas) yesterday announced strong earnings for the first half of 2017, contributed by higher average realised prices, better margins and boosted by the on-going transformation initiatives to reduce cost and increase efficiency.
The Group’s revenue grew to RM108.1 billion, up 15 per cent from RM93.7 billion in the first half of 2016, benefitting from the upward trend of key benchmark prices and foreign exchange rate, but was partially offset by lower sales volume.
Profit after tax (PAT) rose more than a 100 per cent to RM17.3 billion from RM6.4 billion in the corresponding period last year, notably due to higher average realised prices as well as lower net impairment on assets and well costs.
The increase however was partially offset by higher amortisation of oil and gas properties, tax expenses, net foreign exchange losses and costs related to the non-Final Investment Decision (FID) for the Pacific NorthWest LNG Project in Canada.
Earnings before interest, tax, depreciation and amortisation (EBITDA) was RM45.2 billion, a 35 per cent increase compared to RM33.6 billion recorded during the same period last year.
Datuk Wan Zulkiflee Wan Ariffin, Petronas’ president and group chief executive officer said, “We have closed out the first half of the year with stronger financials compared to the same period in 2016.
“While the price of oil was a significant factor, I also view this as tangible results of Petronas’ transformation measures taken in response to the industry downturn. And I attribute this to the employees of Petronas.
“They continue to drive impactful changes, which create ripple effects that, as you can see, have positively improved the bottom-line.”
The Group’s cash flows from operating activities also increased by 55 per cent to RM39.8 billion compared to RM25.6 billion in the same corresponding period in 2016.
Capital investments totalled at RM21.3 billion, mainly attributable to the Refinery and Petrochemical Integrated Development (RAPID) project in Pengerang, Johor.
Meanwhile year-to-date crude oil, condensate and natural gas entitlement volume was 1,778 thousand barrels of oil equivalent (BOE) per day while total production volume was 2,342 thousand BOE per day.
Total assets decreased to RM596.6 billion as at 30 June 2017 from RM603.4 billion as at December 31, 2016 primarily due to the impact of the strengthening of the Ringgit against the US dollar.
Shareholders’ equity of RM375.8 billion decreased by RM4.6 billion mainly due to the approved dividend of RM13 billion for the financial year ended 31 December 2016 and the foreign exchange rate impact, partially offset by profit generated during the period.
Gearing ratio decreased to 17.1 per cent as at 30 June 2017 from 17.4 per cent as at December 31, 2016.
Quarter on quarter, Petronas’ performance for 2Q17 also improved, largely driven by the upward trend of key benchmark prices and better margins.
PAT was registered at RM7 billion compared to RM1.7 billion in 2Q16, a significant improvement mainly due to lower net impairment on assets and well costs, coupled with higher average realised prices recorded across all products.
This was partially offset by higher net foreign exchange losses, amortisation of oil and gas properties and non-FID costs for Pacific NorthWest LNG Project in Canada.
The PAT was posted on the back of a RM 51.6 billion revenue, a 10 per cent increase from RM46.9 billion from the corresponding quarter last year as a result of higher average realised prices and foreign exchange rate impact.
EBITDA increased by 16 per cent to RM20.6 billion from RM17.8 billion in the corresponding quarter last year.
The Group’s cash flows from operations also grew by 37 per cent to RM21.8 billion from RM15.9 billion in the corresponding quarter last year due to higher average realised prices.
“Despite higher prices compared to a year ago, the industry remains volatile tempering the company’s optimism,” it added. “Petronas continues to focus on internal transformation initiatives, effective cash management and cost optimisation.
The Board expects the overall year-end performance of Petronas Group to be fair.”
Source: Borneo Post Online