KUALA LUMPUR: Petroliam Nasional Bhd’s group pre-tax profit fell 60% in the first quarter ended March 31, 2016 to RM6.8bil as it was impacted by lower revenue and prolonged weak prices and it expects the challenging times to continue.
“Concerns on moderate demand outlook and persistent oversupply will continue to pressure crude oil prices. Petronas expects performance to be affected by the volatility of oil prices and foreign exchange rate,” it said on Wednesday as pre-tax profit slumped from RM17bil a year ago
The national oil company said it will continue with its cost rationalisation efforts to remain competitive while pursuing efforts to drive operational efficiencies and effective delivery of growth projects that bring value. Revenue fell 26% to RM49.1bil from RM66.2bil
“Profit after tax and impairments was recorded at RM4.6bil (down 59.6%) against RM11.4bil in the previous corresponding quarter,” it said.
“The reduced revenue was mainly attributed to the lower product prices following the prolonged downward trend of benchmark Dated Brent and Japan Customs Cleared (JCC) prices, coupled with the lower sales volumes of crude oil and condensates, processed gas and petroleum products,” it said.
Petronas said its profit was affected by lower prices across all products and higher net impairment on assets. Its total assets fell 4.1% to RM567.6bil as at March 31, 2016 from RM591.9bil as at Dec 31, 2015 which was “primarily attributable to the impact of a comparatively lower US dollar exchange rate against the Ringgit at March 31, 2016”.
* Shareholders’ equity fell 2.7% to RM364.7bil from RM374.9bil as at Dec 31, 2015.
*Gearing ratio decreased to 15.8 per cent as at 31 March 2016, compared to 16.0 per cent as at Dec 31, 2015.
* Return on average capital employed (ROACE) declined to 3.5% from 5.1% as at Dec 31, 2015.
* Cash flows from operating activities fell 44% compared to the a year ago in line with lower revenue recorded for the quarter, while capital investments totalling RM11.3bil was mainly attributed to the Refinery and Petrochemical Integrated Development (RAPID) project in Johor and upstream capital expenditure in Malaysia.
* Upstream production volume in Malaysia and Petronas Group’s international equity production volume rose to 2.45 million barrels of oil equivalent (BOE) per day from 2.39 million BOE per day in 2015. The main factors, it said was due to higher Iraq production entitlement and new production stream from Indonesia, offset by natural decline.
* Production entitlements to Petronas Group was up 9% to 1.82 million BOE per day.
* Total liquefied natural gas (LNG) sales volume fell 9% to 7.35 million tonnes from a year ago, which it said was because of lower production from its Bintulu LNG Complex in Bintulu.
