PETRONAS Delivers Commendable Q1 Performance

PETRONAS posted favourable results for the first quarter ended 31 March 2018, with an increase in Profit After Tax (PAT) of 26 per cent from the corresponding period in the previous year, supported by the Group’s ongoing focus on overall business improvement initiatives and operational excellence, coupled with a recovery in commodity prices. 

The Group’s revenue grew by RM1.4 billion to RM57.9 billion, from RM56.5 billion in the first quarter last year. The increase was mainly due to higher average realised prices recorded across all products, largely offset by the effect of the strengthening of the Ringgit against the US Dollar exchange rate. 

First quarter PAT totalled RM13.0 billion, increased by 26 per cent on the back of higher revenue and net write-back on impairment. 

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) registered a modest growth of 2 per cent to RM25.0 billion from RM24.6 billion in the corresponding quarter last year.

Cash flow from operations rose to RM21.9 billion, an increase of 22 per cent from RM18.0 billion in the same quarter last year. 

Total assets decreased marginally to RM592.8 billion as at 31 March 2018, from RM599.8 billion as at 31 December 2017, due to the impact of the strengthening of the Ringgit against the US Dollar. Shareholders’ equity of RM390.7 billion as at 31 March 2018 increased by RM0.9 billion compared to RM389.8 billion as at 31 December 2017 mainly contributed by profit generated during the period partially offset by the movements in foreign currency translation reserves.

Gearing ratio of 16.2 per cent as at 31 March 2018 was slightly higher by 0.1 per cent as compared to 16.1 per cent as at 31 December 2017. Meanwhile, Return on Average Capital Employed (ROACE) increased to 10.4 per cent, from 9.8 per cent previously in line with higher profit recorded. 

The Group’s capital investment during the quarter was RM12.0 billion, mainly attributable to the Refinery and Petrochemical Integrated Development (RAPID) Project in the southern Malaysian state of Johor.

Outlook
The Group will continue to drive for productivity and growth on the back of oil price recovery. Subject to volatility of oil price and foreign exchange rate, the Group expects the overall year-end performance to be satisfactory.

Tan Sri Wan Zulkiflee Wan Ariffin, President and Group CEO PETRONAS

“Our encouraging performance in the first quarter of the year was attributed to our ongoing transformation efforts which focus on overall business improvement and operational excellence, coupled with a recovery in commodity prices.

While oil prices have trended upwards, the industry must continue to be diligent in institutionalising the cost-effective discipline and the drive for efficiencies pursued over the past few years. This will ensure the sustainability of Malaysia’s oil and gas industry in the current competitive global landscape.”

Issued by
Media Engagement
Group Strategic Communications
PETRONAS

For media enquiries, please contact:
Azeman Said: azeman_said@petronas.com | +60 13 3311 699

Johannes Ridu: johannes_ridu@petronas.com | +60 19 2612 832

Operational Highlights

Upstream

• In the first quarter of 2018, our Upstream business’ PAT increased to RM10.2 billion compared to RM5.1 billion in the same period last year, mainly due to higher revenue coupled with net write-back on impairment.
• In the same period, revenue increased to RM37.2 billion compared to RM34.6 billion in the corresponding quarter last year. Higher revenue was mainly contributed by higher average realised prices across all products. The increase was partially offset by the strengthening of the Ringgit against the US Dollar exchange rate.
• Total production volume for the quarter rose to 2,461 thousand boe per day compared to 2,387 thousand boe per day in the same quarter last year, mainly due to higher gas demand in JDA and Turkmenistan.
• Total LNG sales volume for the quarter was higher by 0.42 million tonnes as compared to the corresponding quarter last year, mainly attributable to higher volume from both PETRONAS LNG Complex (PLC) and trading activities.
• Malaysia average sales gas volume increased by 61 mmscfd compared to the same period last year, mainly contributed by higher demand.

Downstream

• For the first quarter of 2018, Downstream business recorded PAT of RM2.0 billion, mainly contributed by the solid performance of the petrochemical business. This partially offsets the lower domestic refining margin and the effect of the strengthening of the Ringgit against the US Dollar exchange rate.
• Operationally, our Overall Equipment Effectiveness (OEE) remains commendable across all business segments at 94.7 per cent with domestic refineries and the refinery in Durban, South Africa recording 89.6 per cent and 99.0 per cent respectively.
• Petrochemicals business recorded strong Plant Utilisation rate of 100.0 per cent contributed by healthy feedstock supply, which resulted in higher production activities. Correspondingly, petrochemical sales volume for the first quarter was recorded at 2.2 million metric tonnes, higher than same period last year recorded at 2.0 million metric tonnes.
• In March, PETRONAS and Saudi Aramco concluded the Share Purchase Agreement (SPA) for equal ownership and participation in the operation of the refinery, cracker and selected petrochemical plants within the Pengerang Integrated Complex (PIC). The project has achieved overall progress of 90 per cent as at end of April 2018, and successfully powered its critical components within the refinery complex. PIC is on track to achieve Ready for Start-Up (RFSU) status in 2019.
• The Highly Reactive Polyisobutene (HR-PIB) plant in Gebeng, Pahang, also came on stream in January 2018.