PETALING JAYA: Petroliam Nasional Bhd (Petronas) recorded a net loss of RM3.4 billion for the third quarter of 2020, as compared to the net profit of RM7.4 billion in the third quarter of 2019 primarily due to lower earnings before interest, tax, depreciation and amortisation (ebitda), higher impairment loss on assets and higher tax expenses attributed to derecognition of deferred tax assets, primarily as a result of lower oil and gas prices outlook.
Excluding impairment loss, the group would record a net profit of RM2.6 billion. It recorded a revenue of RM41.1 billion, lower by 25% from RM55.1 billion in the corresponding quarter last year, mainly due to lower average realised prices for major products.
For the cumulative period, the group recorded a net loss of RM19.9 billion for the first nine months of 2020, compared to the net profit of RM36.4 billion in the corresponding period last year given the lower ebitda coupled with the impairment loss on assets. Net profit excluding impairment stood at RM10.3 billion, a 74% decrease from RM39.4 billion compared to the corresponding period in 2019.
The group recorded a revenue of RM134.7 billion, a decline of 24% from RM176.2 billion in the corresponding period last year predominantly driven by lower average realised prices for all products and lower sales volume, mostly from processed gas, liquefied natural gas (LNG) and petroleum products.
The group generated positive cash flows from operating activities amounting to RM32.6 billion, despite the softer results during the period, a decline of 50% from RM64.6 billion in the corresponding period last year.
Capital investments for the period amounting to RM22.5 billion, is mainly attributed to upstream projects. Total assets decreased to RM594.8 billion as at Sept 30, 2020 compared to RM622.4 billion as at Dec 31, 2019, mainly due to impairment loss on assets during the period.
Shareholders’ equity observed a decline to RM337.2 billion as at Sept 30, 2020 compared to RM389.1 billion as at Dec 31, 2019 primarily due to the loss recorded during the period and dividends declared to shareholders amounting to RM34.0 billion whereby RM24.0 billion dividend payment was based on FY2019 performance. The remaining RM10.0 billion was an additional dividend the board had approved to support the unprecedented challenges brought about by the Covi-19 pandemic.
Gearing ratio increased to 25.3% as at Sept 30, 2020 from 19.4% as at Dec 31, 2019, mainly due to reduction in equity associated with the loss for the period ended Sept 30, 2020 and issuance of a new bond in April 2020 of US$6 billion. The bond proceeds are to be used for capital investment, working capital, refinancing and general corporate purposes.
Petronas president and group CEO Tengku Muhammad Taufik said having persevered through nine grueling months, it has recorded slight improvements in Q3’20 compared to the previous quarter resulting from sporadic easing of lockdowns which has led to gradual resumptions of economic activities worldwide. Amid the fluid operating environment brought about by the pandemic as well as prolonged volatility of oil prices, Petronas is adopting a cautious outlook and anticipates that the remainder of 2020 will be challenging.
“We expect our performance to be continuously affected by the volatility of oil prices aggravated by the ongoing pandemic. We remain focused on our deliberate steps to reshape our portfolio, retool our human capital equation and focused execution at pace in managing the unpredictable business environment as we strive towards our three-pronged growth strategy.”
On its outlook, Petronas said prolonged low oil price and moderate demand recovery impacted by the pandemic continue to pose challenges to the industry.
Despite these challenges, Petronas will remain focused in maintaining portfolio resilience, upholding disciplined capital and operational spending as well as preserving liquidity to ensure business sustainability.
The board expects the performance of Petronas in the final quarter of 2020 to be continuously affected by the challenging business environment.
