PETRONAS has recorded higher Q3 2017 earnings, attributed to improved performances of its upstream and downstream businesses and supported by recovering commodity prices, stronger margins as well as its on-going group-wide transformation initiatives.
The Group’s revenue for the quarter ended 30 September 2017 totalled RM53.7 billion, up by 14 per cent from the corresponding quarter last year, driven by higher average realised prices for major products and impact of foreign exchange rate.
Profit After Tax (PAT) rose to RM10.0 billion from RM6.1 billion in the corresponding quarter last year primarily due to higher revenue recorded, in addition to lower net impairment on assets and well costs. This was partially offset by higher tax expenses, product costs and amortisation of Oil and Gas Properties.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew to RM21.5 billion from RM15.2 billion in the corresponding quarter last year in line with higher Profit Before Tax (PBT).
Capital investments for the quarter was RM12.5 billion, mainly attributable to the Refinery and Petrochemical Integrated Development (RAPID) project in Johor.
For the cumulative period ended 30 September 2017, PETRONAS Group recorded a 15 per cent increase in revenue at RM161.8 billion, mainly due to the impact of higher average realised prices and the impact of foreign exchange rate.
Cumulative PAT was RM27.3 billion compared to RM12.5 billion in the same period last year, primarily due to lower net impairment on assets and well costs.
Total assets decreased to RM600.3 billion as at 30 September 2017 compared to RM603.4 billion as at 31 December 2016 due to stronger Ringgit against US Dollar.
Shareholders’ equity decreased to RM380.3 billion mainly due to the final dividend of RM13.0 billion to the government declared for the financial year ended 31 December 2016 and the interim dividend of RM3.0 billion declared for financial year ending 31 December 2017, as well as foreign exchange rate impact partially offset by profit generated during the period.
Gearing ratio decreased to 17.3 per cent as at 30 September 2017 compared to 17.4 per cent as at 31 December 2016. ROACE increased to 8.6 per cent as at 30 September 2017 compared to 5.4 per cent as at 31 December 2016 in line with higher profit recorded.
In light of modest recovery in oil price and the continued drive for efficiency improvement, PETRONAS expects the Group’s overall year-end performance to be better than last year.
Tan Sri Wan Zulkiflee Wan Ariffin, President and Group CEO PETRONAS
“We remain committed to improving efficiency across our operations, and will continue to focus on our transformation initiatives which have produced tangible results. We intend to enhance our efforts to take advantage of the current recovery in oil prices for PETRONAS to close the year strongly.”
The total production volume for the cumulative period ended 30 September 2017 was 2.30 million BOE per day compared to 2.34 million BOE per day in the same period last year. Total production entitlement decreased to 1.74 million BOE per day from 1.76 million BOE per day compared to the same period last year. This was mainly due to lower Iraq production entitlement, lower production in Canada and higher decline rate in JDA and Egypt.
However, an increase in gas production was recorded from Kebabangan and NC3 fields. Two greenfield projects were brought on-stream in the third quarter of 2017 – Kumang F12 and B15, both offshore East Malaysia, contributing to 24 million standard cubic feet per day.
Liquefied Natural Gas (LNG) sales recorded a 2 per cent increase in volume compared to the same period last year mainly attributable to the higher volume from Train 9, Gladstone LNG and Egyptian LNG coupled with new volume from PETRONAS Floating LNG 1.
Meanwhile, continuous efforts in cash management and cost optimisation, including re-basing cost in the upstream business, have recorded RM1.9 billion in savings for the cumulative period ended 30 September 2017 through improved efficiencies and innovation in the value chain.
PETRONAS signed an agreement with PTT Global LNG (PTTGL) for PTTGL’s 10 per cent equity participation in PETRONAS LNG 9 Sdn. Bhd, as well as a long-term Sale and Purchase Agreement with S-Oil Corporation for the supply of LNG.
Downstream business recorded a cumulative PAT of RM8.6 billion for the period ended 30 September 2017. This was mainly driven by sustained operational performance, lower operating costs as well as higher product prices.
Downstream Overall Equipment Effectiveness (OEE) was 94.5 per cent with refineries in Kertih, Malaysia and Durban, South Africa recording 99.4 per cent and 99.9 per cent respectively. Crude and petroleum products continued to capture higher margins which was attributed by focused trading strategies.
Petrochemicals business sustained its operational performance and recorded plant utilisation at 91 per cent. Sales volume for the period ended 30 September 2017 increased by 9 per cent compared to last year, mainly contributed by additional volume from the commissioning of PETRONAS Chemicals Fertiliser Sabah Sdn Bhd (SAMUR Project) in May 2017.
The Pengerang Integrated Complex (PIC) has achieved 81 per cent completion as at November 2017 and remains on track to achieve ready for start-up status in 2019.