Thursday 28 Mar 2024
By
main news image

KUALA LUMPUR (Nov 5): S&P Global Ratings said today Malaysian state-owned oil and gas producer Petroliam Nasional Bhd's (Petronas) solid balance sheet, sizable net cash position and ample liquidity provide ample buffer against the payment of a one-off dividend that could reach RM30 billion to the government.

S&P Global Ratings said in a statement Petronas can finance the dividend, given cash and short-term equivalent of nearly RM180 billion as of June 30, 2018; immaterial reported debt of about RM66.3 billion; and net cash position of nearly RM114 billion. S&P Global Ratings said Petronas has solid operating cash flows.

"An exceptional dividend of RM30 billion would effectively offset inflows of nearly RM30 billion the company received following the completion of the transaction with Saudi-based oil and gas producer Saudi Aramco in the first quarter of 2018.

"The financial impact of a one-off dividend of this size is moderate for Petronas' cash position and balance sheet quality, in our view," the rating agency said.

According to S&P Global Ratings, the special dividend validates its long-standing credit view that Petronas can be subject to periodic cash calls from the government given its solid financial position, high importance to the national budget, and ownership control by the government.

"We believe a sustained period of higher oil prices over the next two to three years will translate into higher dividends from Petronas, and potentially additional one-off dividends to the state," it said.

      Print
      Text Size
      Share