Petronas registers 9% earnings growth in Q1

PETALING JAYA: Petroliam Nasional Bhd (Petronas) recorded a 9% year-on-year growth in net profit to RM14.2 billion in the first quarter of 2019, on the back of higher revenue while earnings before interest, tax, depreciation and amortisation grew 11% to RM27.8 billion.

The national oil company said in a statement today that while revenue drove earnings, this was partially offset by increased net product and production costs, lower net write-back of assets impairment and higher contribution to the National Trust Fund.

The group’s revenue for the quarter rose 7% to RM62 billion from RM57.9 billion a year ago, driven by higher sales volume for petroleum products and liquefied natural gas (LNG) coupled with the effect of the weakening ringgit against the exchange rate.

These were partially offset by lower average realised prices, mainly for petroleum products, crude oil and condensates.

Cash flows from operations rose 6% to RM23.2 billion from RM21.9 billion a year ago while total assets fell marginally to RM636.2 billion as at March 31, 2019 from RM636.3 billion as at Dec 31, 2018.

Shareholders’ equity increased to RM389.1 billion compared to RM380.5 billion in the same period last year, primarily driven by profit generated during the period. However, this was partially offset by movements in the foreign currency translation reserve.

Gearing ratio increased to 20.8% as at March 31, 2019 from 19.7% as at Dec 31, 2018, as additional lease liabilities were recognised following the adoption of MFRS 16 Leases.

Meanwhile, return on average capital employed increased slightly to 12.1% from 12% in the previous quarter, in line with the higher profit recorded.

The group’s capital investment during the first quarter of 2019 stood at RM8.3 billion, mainly attributable to upstream projects.

“Petronas’ improved performance in the first quarter of 2019 compared to the same period last year demonstrates the strength of our three-pronged strategy and resolute execution focused on continuous overall business improvement as well as commercial and operational excellence,” said its president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin (pix).

“Looking ahead, while facing market uncertainties, we will continue to invest for the future and have recently expanded our upstream portfolio through our equity acquisition of the Tartaruga Verde field in Brazil. Our strategic intent to venture beyond oil and gas has also made significant progress with our recent investments in renewables and specialty chemicals,” he said in a statement today.

Petronas expects the oil and gas industry to continue operating in a challenging environment arising from market uncertainties and geopolitical risks. As such, its overall year-end performance would be affected by the rising volatility of and foreign exchange movement.

However, it will maintain efforts in instilling strong cost discipline and driving operational excellence in pursuit of its growth strategies.

Source: The Sun Daily

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