KUALA LUMPUR (May 31): Petroliam Nasional Bhd (Petronas) said its net profit grew 9% to RM14.2 billion in the first quarter ended March 31, 2019 (1QFY19) from RM13 billion in the same quarter a year ago, supported by increased sales volume and the weakened local currency.

Its revenue for the quarter rose 7% year-on-year to RM62 billion from RM57.9 billion, which was attributed to higher sales volume of petroleum products and liquefied natural gas (LNG), coupled with the weakening of the ringgit against the US dollar.

The revenue growth, however, was moderated by lower average realised prices for petroleum products, crude oil and condensates, the group said in a media statement.

The group's earnings before interest, tax, depreciation and amortisation (Ebitda) grew 11% to RM27.8 billion from RM25 billion in the same quarter a year earlier.

"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 Petronas president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin.

Segmentally, its upstream business reported a net profit of RM9.2 billion for the quarter, down from the RM10.2 billion reported in the previous year, due to higher product cost and lower net write-back of impairment on assets, though these were partially offset by higher revenue achieved.

Total production volume for the quarter was 2,430 thousand barrels of oil equivalent (boe) per day, slightly down from 2,461 thousand boe per day in the same quarter last year, mainly dragged by lower crude production in Iraq.

Total LNG sales came in at 8.45 million tonnes, higher than the 7.92 million tonnes recorded a year ago, thanks to higher volume from the Petronas LNG Complex (PLC) in Bintulu, Sarawak, and higher trading activities.

Its downstream segment, meanwhile, saw a slight dip in net profit to RM1.9 billion against RM2 billion reported in the same quarter a year earlier, though overall equipment effectiveness remained stable at 93.6% across all business segments. Mid-stream also recorded strong operational performance, high plant reliability and healthy market demand, the group said.

In terms of gearing ratio, the group posted an increase to 20.8% as at end-March, compared with 19.7% as at end-December, as additional lease liabilities were recognised following the adoption of Malaysian Financial Reporting Standard 16 (MFRS 16). The group made RM8.3 billion in capital investment during the quarter, which mainly went to upstream projects.

On prospects, Petronas expects conditions to remain challenging for the oil and gas industry amid market uncertainties and geopolitical risks, and that rising oil price volatility and foreign exchange rates will affect the group's performance for the year.

"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," said Wan Zulkiflee.