KUALA LUMPUR: National oil and gas company Petroliam Nasional Bhd (Petronas) reported lower earnings for the fourth quarter ended Dec 31, 2019 of RM4.1 billion, a 71% decrease from RM14.3 billion seen in Q418 primarily due to an impairment of assets and lower revenue.
During the group’s financial performance briefing today, Petronas president and group CEO Tan Sri Zulkiflee Wan Ariffin (pix) said excluding the impairment charges, the group’s net profit stood at RM9.2 billion, a 14% reduction from Q4 18.
Revenue for the quarter was RM64 billion, 8% lower than RM69.9 billion at the same time last year on lower average realised prices for major products.
For the full year, its net profit was RM40.5 billion, 27% lower than the RM55.3 billion in the previous year, mainly due to lower revenue as well as net impairment on assets amounting to RM7.3 billion.
Revenue also dipped 4% to RM240.3 billion compared to RM251 billion, also on lower average realised prices.
On dividends, Wan Zulkiflee said this year the group is planning on paying out RM24 billion in dividends, with no special dividend planned.
“Our dividend payout is based on our preceding year results, but 2019 was a unique year since our payout of RM54 billion to the government last year was split between a normal dividend of RM24 billion and a special dividend of RM30 billion,“ he said.
Petronas’ cash flow from operations rose 5% to RM90.8 billion, while free cash flow saw an increase of 9% to RM43 billion - which will help buffer Petronas’ growth strategy going forward.
Capital investments for the year recorded a 2% increase to RM47.8 billion, mainly on the group’s upstream, gas & new energy and downstream projects.
For 2020, the group is maintaining its RM50 billion expenditure target, but foresees a 10% increase in capex for Malaysia to RM26-28 billion.
Wan Zulkiflee said 2019 had been a tough year for the group, as the industry was continuously marred by consistent and prolonged volatility.
“There was continued pressure on commodity prices and margins with crude oil prices dropping to US$64 per barrel in 2019, compared to US$71 per barrel in 2018. Natural gas prices were US$350 mmbtu, the lowest seen in a decade,“ he said.
Looking forward, Wan Zulkiflee noted that the outlook for the oil & gas industry remains bearish due to ongoing geopolitical uncertainties, prolonged trade tensions and near term demand disruptions caused by the Covid-19 outbreak.
“We do expect our financial performance this year to be affected by these factors, but notwithstanding these challenges, Petronas will continue to deliver operational excellence and growth strategies,“ he said.
