Petronas cautious on rest of 2017 despite doubling Q1 net profit

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas), which saw its net profit for the first quarter ended March 31, 2017 more than double, will maintain its conservative outlook for the remainder of 2017, citing the continued drag on oil prices.

“The group continues to maintain 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,” it said in a statement on its results released last Friday.

Petronas made a net profit of RM10.3 billion for the quarter under review, compared with RM4.6 billion in the same period last year.

This was primarily driven by higher oil prices and improved margins from the upstream and downstream businesses in tandem with Petronas’ ongoing transformation efforts that have resulted in heightened cost-optimisation and efficiency improvements.

The increase in net profit was also contributed by higher revenue for the quarter, which benefited 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.

Revenue grew by 25% to RM61.6 billion from RM49.1 billion recorded in the same quarter of 2016, due to higher average realised prices recorded across all products, exchange rate impact and higher processed gas sales volume. This was partially offset by lower crude oil & condensate and petroleum product sales volume.

Meanwhile, internal efforts to reduce cost and improve efficiency continued to allow Petronas to reduce controllable operating expenditure from RM11.4 billion to RM11.1 billion.

Petronas will focus on its group-wide efforts to optimise costs, further improve efficiency and operational excellence through strategic collaborations within the industry.

Petronas president and group CEO Datuk Wan Zulkiflee Wan Ariffin said its strong performance in the first quarter was driven largely by its transformation initiatives, which continue 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 said in a statement in conjunction with the release of the results.