Petronas' Q3 net profit leaps fourfold to RM6.1b

PETALING JAYA: Petroliam Nasional Bhd (Petronas) saw its net profit surge more than fourfold to RM6.1 billion for the third quarter ended Sept 30, 2016 from RM1.35 billion in the previous corresponding period, due to lower product and production costs, favourable foreign exchange and lower net impairment on assets.
Revenue for the quarter under review fell 18.9% to RM48.74 billion from RM60.06 billion.
For the first nine months of the year, however, Petronas’ net profit dropped 48.6% to RM12.25 billion from RM23.82 billion on the back of a 22% decline in revenue to RM146.31 billion from RM187.56 billion. This was mainly due to the downward trend of global crude oil prices, higher net impairment on assets and well costs as well as lower sales volume of petroleum products, crude oil and condensates and processed gas.
Third-quarter net profit for its upstream business came in at RM2.4 billion, a 24-fold jump from RM100 million in the same period last year, while the downstream operation reported a 19-fold leap from RM100 million to RM1.9 billion, driven by higher refining margins.
The state-owned oil major said in a statement yesterday that its year-to-date cash flows from operating activities decreased 29% to RM36.1 billion from RM51.2 billion, due to lower revenue as a result of the downward trend of prices.
Nonetheless, its efforts to lower cost resulted in a 9% decline in year-to-date controllable cost to RM30.7 billion from RM33.9 billion in the corresponding period last year.
Petronas’ total assets decreased to RM581.3 billion as at Sept 30, 2016 from RM591.9 billion as at Dec 31, 2015, primarily due to the dividend payment to date of RM12 billion in respect of the financial year ended Dec 31, 2015 and movement in foreign currency translation reserves.
The group’s capital investments as at Sept 30, 2016 totalled RM35.9 billion, mainly attributed to the Refinery and Petrochemical Integrated Development (Rapid) project in Johor, domestic upstream capital expenditures and the Sabah Ammonia Urea project.
Commenting on prospects, Petronas said the current oil price environment continues to pose significant challenges to the industry and the outlook remains uncertain. “While performance in 2016 is affected, Petronas has been responsive with strong operational efficiency and financial discipline,” it noted.