Hibiscus Q4 earnings slump as tax quadruples

PETALING JAYA: Hibiscus Petroleum Bhd saw its net profit slump by 54.33% in the fourth quarter ended June 30, to RM8.65 million from RM18.95 million in the preceding year’s corresponding quarter, due to higher taxation.

Taxation charges incurred for the quarter under review amounted to RM19.05 million compared with RM4.29 million last year.

The higher charges were due to the impact of a reduction in the rate of supplementary charge on deferred tax liabilities relating to the fair value of identifiable assets and liabilities of the Anasuria Cluster.

The oil and gas exploration and production group’s revenue grew by 52.85% to RM74.47 million from RM48.72 million recorded in the fourth quarter ended June 30, 2016 due to the sale of larger volume of crude oil and a higher average selling price achieved per barrel of oil sold.

In a filing with Bursa Malaysia, the group’s board of directors said it expects a positive financial impact for the end of the calendar year 2017, due to improvements in facilities up time and average daily oil production, which has offset lower crude oil prices and the re-opening of two wells which were shut by the previous operator of the Anasuria cluster, and efforts to reduce operating cost.

It has also identified several projects for execution which will enhance its production volume by bringing on-stream petroleum resources that have already been discovered.

“Going forward, the group will investigate the potential of sub-surface interventions to enhance production rates, possibly commencing in the second half of the financial year ending June 30, 2018. In this regard, several opportunities have been identified and are being aggressively evaluated. This two-pronged approach is expected to keep operating expenditure per boe in check and provide an improved buffer, should oil prices deteriorate in the future,” the board added.

The group turned around for its full year earnings, where it recorded a net profit of RM106.10 million against a net loss of RM59.96 million in the previous year. This is largely attributable to the one-off charges incurred last year, for expenses stemming from the acquisition of the Anasuria Cluster.

Its revenue for the 12-month period surged by more than three-fold to RM261.27 million from RM81.69 million.

At today’s market close, Hibiscus shares fell one sen to 42.5 sen with some 7.85 million shares changing hands. Its market capitalisation stood at RM639.98 million.