March 10, 2013

Petronas Pre-Tax Profit Falls to RM89.08 Billion

Petronas’ pre-tax profit dwindled to RM89.08 billion for the financial year ended Dec 31, 2012 from RM103.79 billion in 2011 amid challenging circumstances.

Executive Vice-President (Finance) Datuk George Ratilal said profit and net operating profit after tax also fell by RM9.6 billion and RM7.7 billion, respectively, due to lower margins, resulting from higher operating costs and impairment losses on certain property, plant and equipment.

However, revenue rose to RM291.0 billion from RM288.5 billion in 2011, he told a media briefing on the national oil corporation’s 2012 financial results today.

For the fourth quarter ended Dec 31, 2012, Petronas’ pre-tax profit declined to RM15.16 billion from RM25.39 billion in the same period in 2011.

Its revenue slipped to RM76.77 billion from RM78.05 billion due to lower crude oil trading volume and ringgit’s appreciation against the US dollar.

Petronas President and Chief Executive Officer Datuk Shamsul Azhar Abbas expects the industry environment for this year not to be more different from last year.

He said the economic climate remains uncertain in the US and at the same time insignificant sign of economic improvement prevailed in Europe.

“We will focus more on increasing oil production this year,” he said, adding that production will increase from domestic discoveries.

“The production from the three fields in Iraq which we started will come on board by the fourth quarter of this year,” he said.

Shamsul Azhar said Petronas will pay a RM27 billion dividend to the government this year vis-a-vis RM28 billion last year.

Shamsul Azhar said he believed Petronas’ RM8.8 billion buyout offer price for MISC Bhd was right despite criticism from minority shareholders that the price was too low.

“We reckon that it is the right number. At the end of the day, it’s very simple, everyone has the right to choose,” he said.

Petronas had offered RM5.30 per share to buy out minority shareholdings in MISC with a view to take the national shipping company private.

Petronas owns 62.67 per cent or 2.797 billion shares in MISC.

On its oil project in Venezuela, Shamsul Azhar said the project was progressing well and the first production will start early next year instead of this year.

“We are still at the entry-level position and it’s a difficult environment to operate in that country.

“With regard to possible growth, hopefully the whole environment is going to change and bankers become more friendly in terms of loan disbursement,” he said.

On Petronas’ operations in Sudan, Shamsul Azhar said Petronas will discuss with the Sudan authorities to extend the production period.

“Sudan is still our cash cow. In fact, all our investments have been fully recovered,” he added.

The oil giant’s exploration and production revenue posted a decline due to stop-order instruction in south Sudan operations and asset impairment in Egypt. 

Source:  BERNAMA