Malaysian state oil corporation Petroliam Nasional Bhd. (PET.YY) said Monday that first-quarter net profit rose 60% from a year earlier on higher oil prices and cost-cutting measures, but warned of a sequentially weaker second half on concerns over a weak global economy.
Malaysian state oil corporation Petroliam Nasional Bhd. (PET.YY) said
Monday that first-quarter net profit rose 60% from a year earlier on higher oil
prices and cost-cutting measures, but warned of a sequentially weaker second
half on concerns over a weak global economy.
Malaysia's only Fortune 500 company and the country's most profitable
firm--popularly known as Petronas--said net profit in the three months ended
June 30 increased to MYR12.3 billion ($3.99 billion) from MYR7.7 billion a year
earlier.
Revenue in the fiscal first quarter rose to MYR58.6 billion from MYR46.4
billion.
Petronas said in a statement that its stronger performance was underpinned by
higher oil and petroleum product prices, as well as improved operational
efficiencies and cost optimization initiatives.
President and Chief Executive Shamsul Azhar Abbas said net profit for the
financial year ending March 31 may be "slightly better" than in the
just-ended fiscal year.
Shamsul told a news conference that although results in the first half will be
"good", performance in the second half may stay at status quo at
best, or "move downwards."
"Things are not going to be as rosy as expected," he said, adding
that the possibility of a double-dip recession in developed economies could
damp earnings.
In the year ended March 31, Petronas posted a net profit of MYR40.3 billion on
revenue of MYR216.4 billion.
Shamsul said the group continues to look for merger and acquisition
opportunities outside
Malaysia
,
particularly upstream targets, but there will be "greater emphasis on
domestic deepwater and unconventional plays to arrest domestic production
declines."
Shamsul, however, said that Petronas has no plans to take over a stake in
Iran
's
Azadegan oilfield from
Japan
's
Inpex Corp., which may pull out to avoid
U.S.
sanctions.
Petronas is no longer involved in
Iran
's
South Pars project after its contract expired, he added.
Total oil and gas production in
Malaysia
during the fiscal first quarter was 0.3% higher at 1.592 million barrels of oil
equivalent a day compared with 1.587 million boe/day a year earlier, Petronas'
head of exploration and production Wee Yiaw Hin said at the same press
conference.
Wee said that of the total, Petronas' entitlement was 1.079 million boe/day
compared with 1.084 million boe/day a year earlier. The 0.5% decline was due to
slightly-higher entitlements of other operators, he said.
Overseas production in the first quarter fell 1.8% on year to 279,000 boe/day
from 284,000 boe/day due to the expiry of a service contract on a block in
Iran
, Wee
added.
Petronas Vice-President Finance George Ratilal said the group's first-quarter
return on average capital employed at 30.9% was "at par with more
established players" on the back of higher oil prices and improved market
sentiment.
The company's leverage ratio rose to 17.8% from 14.6% a year earlier primarily
due to its $4.5 billion bond issue in August 2009, he said. Petronas is one of
Malaysia
's
largest bond issuers.
Ratilal said the exploration and production division contributed MYR11.8 million--the
largest share--of a total of MYR21.4 billion in gross operating profit in the
first quarter. Gas and power posted MYR6.2 billion, while the downstream
division contributed MYR2.0 billion in gross operating profit.
Shamsul said Petronas plans to pay a dividend of MYR30 billion to the
government for the current fiscal year, the same amount it paid the previous
year.
Unlisted Petronas controls several listed units such as shipping firm MISC Bhd.
(3816.KU), retail gasoline station operator Petronas Dagangan Bhd.(5681.KU) and
gas distributor Petronas Gas Bhd. (6033.KU).
It is in the process of listing its petrochemicals unit--Petronas Chemicals
Group Bhd.--expected to be completed by the year-end, while MISC is also
listing unit marine engineering unit, Malaysian Marine & Heavy Engineering
Holdings Bhd. by the end of this month.
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