KUALA LUMPUR (Aug 25): Higher average realised prices, lower net impairment on assets and well costs raised Petroliam Nasional Bhd (Petronas)'s profit after tax by 311.7% to RM7 billion in the second quarter ended June 30, 2017 (2QFY17) from RM1.7 billion last year.

In a statement today, the national oil firm said this was partially offset by higher net foreign exchange losses, amortisation of oil and gas properties and non-final investment decision costs for Pacific North West liquefied natural gas in Canada.

It said quarterly revenue grew 10% to RM51.6 billion compared to RM46.9 billion last year due to higher average realised prices and foreign exchange rate impact.

For the first half ended June 30, 2017 (1HFY17), profit after tax surged 170% to RM17.3 billion from RM6.4 billion in the corresponding period last year on the back of RM108.1 billion revenue, up 15% from RM93.7 billion in 1HFY16.

While earnings was contributed by better margins and boosted by ongoing transformation initiatives to reduce cost and increase efficiency, revenue benefitted from the upward trend of key benchmark prices and foreign exchange. It was partially offset by lower sales volume.

Petronas said cash flows from operations in 2QFY17 grew by 37% to RM21.8 billion from RM15.9 billion in the corresponding quarter last year due to higher average realised prices.

Capital investments totalled RM21.3 billion, mainly attributable to the Refinery and Petrochemical Integrated Development (RAPID) project in Pengerang, Johor.

Year to date, crude oil, condensate and natural gas entitlement volume was 1,778 thousand barrels of oil equivalent (BOE) per day while total production volume was 2,342 thousand BOE per day.

It added that total assets decreased to RM596.6 billion as at June 30, 2017 from RM603.4 billion as at Dec 31, 2016 as a result of the strengthening ringgit against the US dollar.

Gearing ratio dropped to 17.1% as at June 30, 2017 compared to 17.4% as at Dec 31, 2016.

Petronas said the industry remains volatile tempering the company's optimism despite higher oil prices now.

However, it would continue to focus on internal transformation initiatives, effective cash management and cost optimisation.

On its upstream operations, Petronas said it has made progress in re-basing its cost and expects to reduce unit production cost to an average of US$6.8 per barrel through efficiency across its value chain.

It added that as part of its portfolio high-grading efforts, Petronas would divest its position in Algeria.

Petronas president and group chief executive officer Datuk Wan Zulkiflee Wan Ariffin said the oil company has closed out the first half of the year with stronger financials compared to last year.

"While the price of oil was a significant factor, I also view this as tangible results of Petronas' transformation measures taken in response to the industry downturn," he said.

He attributed the performance to Petronas employees who drive impactful changes, which create ripple effects that have improved the bottom-line positively.

Looking forward, the group expects overall year-end performance to be fair.