KUALA LUMPUR — June 2, 2017: This year’s first quarter pre-tax profit for Petronas surged more than 100 per cent to RM15.5 billion .
The higher earnings was primarily driven by higher oil prices and improved margins from upstream and downstream businesses in tandem with the national oil company’s on-going transformation efforts that have resulted in heightened cost-optimisation and efficiency improvements across its value chain.
Stronger pre-tax profit for the quarter was also mainly contributed by higher revenue, which benefitted from higher average realised prices and lower net impairment on assets, partially offset by higher taxation, amortisation of oil and gas properties and product costs, it said in a statement today.
Revenue grew by 25 per cent to RM61.6 billion, boosted by higher average realised prices recorded across all products, exchange rate impact and higher processed gas sales volume.
President and Group Chief Executive Officer Datuk Wan Zulkiflee Wan Ariffin said the group’s strong performance was driven largely by its transformation initiatives which continued to gain traction.
“This has strengthened internal collaborations across our upstream and downstream businesses, resulting in improved plant utilisation rates, production and the overall creation of substantial value.
“We will continue to focus on driving our upstream and downstream businesses to maximise returns in unlocking value as a fully integrated oil and gas company,” he added.
Earnings before interest, tax, depreciation and amortisation increased RM9.0 billion or 58 per cent to RM24.6 billion while the group’s cash flows from operations also grew 86 per cent to RM18.0 billion as a result of higher average realised prices.
Internal efforts to reduce cost and improve efficiency continued to allow Petronas to reduce controllable operating expenditure to RM11.1 billion from RM11.4 billion.
But total assets decreased to RM602.1 billion as at March 31 from RM603.3 billion as at December 31, 2016, as a result of a stronger ringgit against the US dollar.
Moving forward, Petronas maintains a conservative outlook for the remainder of 2017 despite the positive results, as supply and demand balances are still slow to return to a sustained equilibrium.
The group will focus on its group-wide efforts to optimise costs, further improve efficiency and operational excellence through strategic collaborations within the industry. — Bernama