Petronas Q1 profit up 9%

PETALING JAYA: Petroliam Nasional Bhd (Petronas) registered a net profit increase of 9% year-on-year to RM14.2bil for the first quarter ended March 31, mainly due to a higher revenue of RM62bil recorded during the quarter.

In a statement yesterday, the national oil company said the net profit achieved during the quarter was partially offset by increased net product and production costs, lower net write-back of assets impairment as well as a higher contribution to the National Trust Fund.

Petronas president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin said the improved financial performance in the first quarter of 2019 demonstrates the strength of the group’s three-pronged strategy and resolute execution, which focuses on continuous overall business improvement and commercial and operational excellence.

The oil and gas industry will continue to operate in a challenging environment arising from market uncertainties and geopolitical risks, the statement said.

As such, the board expects the overall year end performance of the Petronas Group to be affected by rising volatility of oil price and foreign exchange movements.

“Petronas will maintain its efforts in instilling strong cost discipline and to drive operational excellence in pursuit of its growth strategies.

“Looking ahead, while facing market uncertainties, we will continue to invest for the future.

“(We) 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 press release yesterday.

The revenue growth of 7% year-on-year to RM62bil from RM57.9bil a year ago was primarily attributed to the higher sales volume for petroleum products and liquefied natural gas (LNG), coupled with the effect of the weakening ringgit against the US dollar exchange rate.

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

Petroleum product sales volume during the first quarter of the year was 64.3 million barrels, a rise of six million barrels from a year ago, on the back of higher trading activities and improved marketing volumes. Crude oil sales volume was down by 2.1 million to 31.2 million barrels during the quarter under review due to lower crude oil marketing activities. Cash flows from operations rose to RM23.2bil, an increase of 6% from RM21.9bil in the same quarter last year.

The group’s gearing ratio increased to 20.8% as at March 31, 2019, compared to 19.7% as at Dec 31, 2018 due to the recognition of additional lease liabilities following the adoption of a new accounting standard.