KUCHING: Petroliam Nasional Bhd (Petronas) yesterday announced improved earnings for the first half of 2018, driven by the Group’s execution of its continuous business improvement initiatives coupled with increased commodity prices.
The group recorded RM117.2 billion in revenue, up 8 per cent from RM108.1 billion in the first half of 2017, benefitting from ongoing internal efforts to optimise efficiency as well as higher average realised prices for all products and increased production.
This, however, was largely offset by the effect of the strengthening of the ringgit against the US Dollar exchange rate.
Profit after Tax (PAT) rose 54 per cent to RM26.6 billion from RM17.3 billion, compared to the first half of 2017.
The improved results were posted on the back of higher revenue, lower net impairment on assets and well costs as well as other expenses, compared to the first half of 2017.
The increase was partially offset by higher net product and production costs, coupled with higher tax expenses.
According to its president and group chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin, this improvement is attributed to its continuous business improvements and groupwide operational excellence.
We will also endeavour to pursue growth opportunities to ensure Petronas’ long-term sustainability.
“Petronas will continue to play its role in steering efforts that will enhance the competitiveness, capability and resiliency of the local oil and gas industry,” he said when announcing the results yesterday.
“Most importantly, we aspire to nurture a sustainable ecosystem in Malaysia where players not only prosper but also remain competitive in the face of global competition.”
Earnings before interest, tax, depreciation and amortisation (EBITDA) registered a 15 per cent growth to RM52.2 billion, from RM45.2 billion in 1H17.
Petronas’ cash flow from operating activities also increased five per cent to RM41.7 billion, compared to RM39.8 billion in 1H17.
Total assets increased to RM610.7 billion as at June 30, 2018, from RM599.8 billion as at Dec 31, 2017, primarily due to higher cash and fund investments.
Shareholders’ equity of RM389.2 billion decreased by RM0.6 billion, mainly due to the approved final dividend of RM16.0 billion for the financial year ended Dec 31, 2017 and the interim dividend of RM5.0 billion for the current financial year.
The decrease was also contributed by movements in foreign currency translation reserves.
Nevertheless, the decrease in equity was softened by the profit generated during the first half of 2018.
Capital investments for the first half of 2018, was RM19.8 billion, mainly attributed to the Pengerang Integrated Complex (PIC) in Johor.
Quarter-on-quarter, Petronas’ performance for the second quarter of 2018 also improved. Revenue grew to RM59.2 billion, a 15 per cent increase from RM51.6 billion in the second quarter of 2017, on the back of higher average realised prices mainly for petroleum products and crude oil and condensates.
This was largely offset by the effect of the strengthening of the Ringgit against the US Dollar exchange rate.
PAT of RM13.6 billion, registered a marked improvement of 94 per cent compared to RM7.0 billion in the second quarter of 2017.
Similarly, the strong performance was contributed by higher revenue, lower net impairment on assets and other expenses compared to the second quarter of 2017.
These were, however, partially offset by higher tax expenses and increased net product and production costs recorded during the quarter.
EBITDA increased by 32 per cent to RM27.2 billion, from RM20.6 billion in the second quarter of 2017.
The group’s cash flow from operating activities decreased by 10 per cent to RM19.7 billion, from RM21.8 billion in the second quarter of 2017, due to higher working capital and taxes paid which were partially offset by higher average realised prices.