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This article first appeared in The Edge Financial Daily on May 31, 2018

KUALA LUMPUR: National oil major Petroliam Nasional Bhd’s (Petronas) net profit jumped 26.5% to RM13.02 billion in the first quarter ended March 31, 2018 (1QFY18) from RM10.3 billion a year ago, supported by its ongoing focus on overall business improvement initiatives and operational excellence, coupled with a recovery in commodity prices.

Quarterly revenue rose 2.5% to 57.92 billion in 1QFY18 from RM56.52 billion in 1QFY17, mainly due to higher average realised prices recorded across all products. However, this was largely offset by the effect of the strengthening of the ringgit against the US dollar.

Earnings before interest, taxes, depreciation and amortisation for 1QFY18 grew by a modest 2% to RM25.04 billion from RM24.62 billion a year ago.

Petronas also noted that capital investments for 1QFY18 stood at RM11.96 billion, slightly higher than the RM11.93 billion amount in 1QFY17, mainly attributable to the Refinery and Petrochemical Integrated Development project in Johor.

In a statement yesteday, Petronas president and group chief executive officer Tan Sri Wan

Zulkiflee Wan Ariffin said subject to volatility of oil price and foreign exchange rate, the group expects the overall year-end performance to be satisfactory.

“The group will continue to drive for productivity and growth on the back of oil price recovery,” he said.

Wan Zulkiflee said 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 added.

Meanwhile, Petronas’ cash flow from operations rose to RM21.9 billion, up 22% from RM18 billion in 1QFY17.

“Total assets decreased marginally to RM592.8 billion as at March 31, 2018, from RM599.8 billion as at Dec 31, 2017, due to the impact of the strengthening of the ringgit against the US dollar.

“Gearing ratio of 16.2% as at March 31, 2018 was slightly higher by 0.1% compared with 16.1% as at Dec 31, 2017. Meanwhile, return on average capital employed increased to 10.4%, from 9.8% previously, in line with higher profit recorded,” said Petronas.

 

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