PETRONAS PROFIT UP TO RM55.3 BLN
PETRONAS - PETRONAS announced a strong performance for its financial year ended 31 December 2018, contributed by the Group’s continuous focus on fiscal discipline and operational excellence while improving efficiencies, despite a volatile market.
The Group’s revenue increased by 12 per cent to RM251.0 billion compared to RM223.6 billion in the financial year ended 31 December 2017, mainly due to higher average realised prices for all key products. The increase was partially offset by the effect of the strengthening of the Ringgit against US Dollar exchange rate, coupled with the impact of lower sales volume, mainly for LNG.
PETRONAS’ Profit after Tax (PAT) rose by 22 per cent in 2018, to RM55.3 billion, compared to RM45.5 billion in 2017, on the back of higher revenue and supported by net write-back of impairment on assets. These were partially offset by higher net product and production costs, depreciation and amortisation as well as tax expenses.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for 2018, increased by 27 per cent to RM116.5 billion, from RM92.0 billion in 2017, in line with higher Profit Before Tax (PBT).
Cash flows from operating activities improved to RM86.3 billion, an increase of 14 per cent from RM75.7 billion in 2017.
Total assets increased to RM636.3 billion as at 31 December 2018, compared to RM599.8 billion recorded in 2017.
Shareholders’ equity stood at RM380.5 billion, a decrease of RM9.3 billion compared to 2017. The profit generated in 2018 was offset by dividends declared during the year.
Return on Average Capital Employed (ROACE) increased to 12.0 per cent compared to 9.8 per cent in 2017, reflecting the higher profit generated during the year.
Gearing ratio increased to 19.7 per cent as at 2018, compared to 16.1 per cent as at 2017, arising from additional provision for the decommissioning of assets following the revision of estimated abandonment costs for oil and gas properties, coupled with lower shareholders’ equity.
Capital investments for 2018, amounting to RM46.8 billion, was mainly attributed to Upstream projects in support of the Group’s operational excellence and growth strategies.
For the fourth quarter of 2018, the Group’s revenue rose to RM69.9 billion, 13 per cent higher compared to RM61.8 billion in the fourth quarter of 2017, mainly due to the impact of higher average realised prices for all key products. However, this was partially offset by the impact of lower sales volume, mainly for LNG.
PAT stood at RM14.3 billion, a decrease of 21 per cent compared to RM18.2 billion in the fourth quarter of 2017, primarily due to higher product costs, depreciation and amortisation as well as petroleum proceeds.
EBITDA increased by 47 per cent to RM37.3 billion, compared to RM25.3 billion in the fourth quarter of 2017, mainly due to higher average realised prices.
Similarly, cash flows from operating activities increased by 68 per cent to RM30.1 billion as compared to RM17.9 billion in the fourth quarter of 2017.
Capital investments for the fourth quarter of 2018, amounted to RM20.3 billion, mainly attributed to growth projects for Upstream business.
Outlook
The oil and gas industry will continue to operate in a challenging environment arising from market uncertainties and geopolitical risks. Despite these challenges, the Group will continue to focus on its operational excellence and growth strategies. The Board expects the
financial performance for 2019 to be affected by the movements in prices.
Tan Sri Wan Zulkiflee Wan Ariffin, President and Group Chief Executive Officer, PETRONAS
“PETRONAS has recorded a strong financial performance in 2018, supported by our ongoing drive to increase operational efficiency and commercial excellence. We have made progress in the pursuit of our long-term strategies and continue to invest for the future.
The oil price is expected to remain volatile in 2019, and uncertainty in various fronts will have a significant impact on prices. For the year ahead, we will remain focused on driving high performance, efficiency and operational excellence and continue to deliver value to our stakeholders and ensure PETRONAS’ long-term sustainability. Looking beyond the horizon, many external challenges will require us to remain agile and continue with our efforts to strengthen our organisation.”
Operational Highlights
Upstream
• Total production volume for the period ended 31 December 2018, stood at 2,361 thousand boe per day as compared to 2,320 thousand boe per day in the same period in 2017, mainly due to higher production from Iraq and Turkmenistan.
• Malaysia’s average sales gas volume was 2,777 mmscfd, higher by 86 mmscfd as compared to the same period in 2017, mainly due to higher demand.
• Total LNG sales volume was 28.94 million tonnes, lower by 1.78 million tonnes as compared to the same period in 2017, mainly attributable to lower volume from LNG plants.
• PETRONAS has successfully secured 10 LNG business deals during the year, which contributed 5.84 million tonnes per annum to our business portfolio.
• PETRONAS through PETRONAS LNG Ltd., entered into a 20-year LNG Sale and Purchase Agreement with Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy Partners, L.P., on 18 Dec 2018, for the purchase of approximately 1.1 mtpa of LNG, subject to certain conditions precedent. The addition of this new volume will enhance PETRONAS’ supply portfolio and further strengthen its position as a reliable global LNG portfolio player.
• PETRONAS through its wholly-owned subsidiary PC Oman Ventures Ltd., has completed the acquisition of a 10 per cent participating interest in Block 61 in the Sultanate of Oman on 27 Dec 2018. This is an important step in supporting PETRONAS Upstream’s growth strategy in the Middle East.
• PETRONAS through its subsidiary, PETRONAS E&P Argentina S.A. (PEPASA) and its partner, Yacimientos Petrolíferos Fiscales S.A. (YPF) has completed the 3-phase pilot programme and is now progressing into the development phase of the La Amarga Chica (LAC) block, located at Neuquén Province, Argentina.
Downstream
• Downstream Business recorded a revenue of RM128.0 billion, 13 per cent higher compared to RM113.6 billion recorded in 2017. PAT is recorded at RM8.5 billion, 25 per cent lower compared to RM11.3 billion recorded in 2017, mainly contributed by higher operating costs and lower refining and marketing margins. Despite these challenges, we sustained commendable operations and remained consistent in the overall performance in 2018 with Overall Equipment Effectiveness (OEE) at 94.4 per cent and Reliability at 97.9 per cent.
• Petrochemicals business sustained its operational performance with Plant Utilisation recorded at 91.9 per cent. The operational performance was contributed by stable operations at all manufacturing plants despite heavy statutory turnaround activities. The highest annual production volume was recorded for the year at 10.4 million metric tonnes with an increase in sales volume to 8.4 million metric tonnes as compared to 2017.
• Overall marketing sales volume stood at 25.2 billion litres for the year. For the full year of 2018, PETRONAS Dagangan Berhad (PDB) recorded a 0.5 per cent increase in sales volume, contributed by impactful marketing campaigns and enhanced customer experience. Our retail business in South Africa under the brand of ENGEN also improved its overall volume, whereas volume for Lubricants recorded a modest growth in selected countries despite higher raw material costs.
• Construction of the Pengerang Integrated Complex (PIC) continues to stay on track. As at December 2018, it achieved 97 per cent progress, and reached Ready for Start Up for its refinery on 21 January 2019, followed by Mechanical Completion & Steam Cracker Fire Up on 12 February 2019. PIC will continue its commissioning stage towards full operation in Q4 2019.
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Earlier:
2018, December, 5, 09:20:00
PLATTS - Argentina's state-run energy company YPF and Malaysia's Petronas agreed Tuesday to invest $2.3 billion in a shale oil project in Vaca Muerta, with a target of reaching 60,000 b/d of oil equivalent by 2022.
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2018, November, 28, 12:05:00
PETRONAS - PETRONAS Group's revenue for the third quarter of 2018 increased by 19% as compared to the third quarter of 2017 mainly due to the impact of higher average realised prices recorded for key products partially offset by the effect of strengthening of Ringgit against US Dollar exchange rate and the impact of lower sales volume mainly for LNG.
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2018, October, 12, 11:15:00
EIA - The project is a joint venture between Royal Dutch Shell (which holds a 40% stake in the project), Petronas (25%), Mitsubishi (15%), PetroChina (15%), and Korea Gas (5%).
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2018, March, 30, 11:10:00
SAUDI ARAMCO - Petroliam Nasional Berhad (PETRONAS), the national oil company of Malaysia, and Saudi Aramco, the national oil company of Saudi Arabia, are pleased to announce the formation of two joint ventures for the Refinery and Petrochemical Integrated Development (RAPID) project.
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2018, March, 4, 10:52:00
GT - Santos and its GLNG partners—Petronas, Total and KOGAS—will make a massive capital investment of $900 million in upstream developments in the Maranoa, Western Downs, Central Highlands and Banana regions in Queensland this year.
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2018, March, 4, 10:40:00
PETRONAS - PETRONAS’ Profit After Tax (PAT) jumped by 91 per cent in 2017 at RM45.5 billion, compared to RM23.8 billion recorded in 2016. The increase was achieved on the back of higher revenue, lower net impairment on assets and well costs and continuous efforts to optimise costs in 2017.
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2017, February, 28, 18:45:00
Saudi oil giant Aramco IPO-ARMO.SE will buy an equity stake in Malaysian firm Petronas' refining and petrochemicals project in the southeast Asian country, the companies confirmed on Tuesday, investing a total of $7 billion.
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