KUALA LUMPUR (Aug 27): Petroliam Nasional Bhd (Petronas) declared an additional RM7 billion dividend to the government, which brings the annual sum to RM25 billion for the financial year ending Dec 31, 2021 (FY21), exceeding the initial target of RM18 billion, according to its President and Chief Executive Officer Tengku Muhammad Taufik Tengku Aziz.
The higher dividend comes after the earnings recovery at the national firm, which posted quarterly net profit of RM9.6 billion for the second quarter ended June 30, 2021 (2QFY21) — a marginal 3.3% growth against RM9.29 billion in the preceding quarter 1QFY21. The latest quarterly net profit is a vast improvement compared with a net loss of RM21 billion in the corresponding quarter last year.
Nonetheless, the annual dividend of RM25 billion for FY21 is lower compared with RM34 billion in FY20.
Speaking in the media virtual briefing today, Tengku Muhammad Taufik said the group’s board members have a fiduciary duty to ensure the additional dividend paid to the government does not threaten the company’s ability to remain liquid in challenging times.
“We are under the scrutiny of external finances, we are under scrutiny of credit rating agencies, the way we spend and making sure that its returns and profits... [and] are always giving attention to our bondholders.
“But in considering this request [extra dividend payment to the government], we did the analysis — we are a company and under the Companies Act, we have to consider our solvency requirements.
“So all of these have been taken into account in the RM7 billion that you saw us declaring,” he said.
Meanwhile, Petronas Group Chief Financial Officer Liza Mustapha added that the oil and gas firm is trying to balance between its current commitments and growth commitments in meeting its obligations to the stakeholders.
“There are a lot of discussions and understanding around affordability, the kind of things which the capital market will give a lot of scrutiny towards before we decide on whether the request (dividend to government) is something we can fulfill,” she highlighted.
Earlier today, Petronas declared its revenue increased 8.6% quarter-to-quarter (q-o-q) to RM57.1 billion in 2QFY21, against RM52.54 billion in 1QFY21. On a yearly basis, Petronas' revenue leaped 68% from RM34 billion a year ago.
Meanwhile, its earnings before interest, tax, depreciation and amortisation (EBITDA) was marginally higher at RM23.2 billion versus RM22.9 billion in 1QFY21. Compared with the corresponding quarter last year, it was more than doubled against RM9.1 billion in 2QFY20.
In a statement, Tengku Muhammad Taufik said Petronas’ solid performance was attributable to its response in enabling continued operational excellence during a period of favourable market conditions in the 1H21.
“This was made possible by the dedicated and selfless service of our front liners and employees Group-wide. Petronas was thus able to leverage its integrated value chain with a sharper focus on commercial excellence and preserve healthy levels of liquidity, which have proven to be advantageous
“Amidst an uncertain outlook, the Group remains steadfast in delivering cost-effective solutions with a lower carbon footprint by advancing its technology and digitalisation agenda.
“Petronas will continue to progress its three-pronged growth strategy at pace and intensify its sustainability efforts to secure new opportunities in the energy transition,” he added.