KUALA LUMPUR (March 13): Spurred by elevated oil and gas (O&G) prices throughout the last year, Petroliam Nasional Bhd (Petronas) posted a record-high full-year profit after tax (PAT) and revenue for the financial year ended Dec 31, 2022 (FY2022).
Petronas' PAT for FY2022, which came in at RM101.62 billion, is about double the RM50.87 billion it earned in the prior year, mainly on the back of higher revenue, offset by higher product costs, cash payments and operating expenditure.
Revenue for the year jumped 51.33% to RM375.27 billion from RM247.96 billion, largely due to higher average realised prices for all products and favourable foreign exchange impact.
The national O&G company’s downstream segment remained its core contributor, logging a revenue contribution of RM185.26 billion in FY2022, a 48.79% increase versus the RM124.51 billion recorded a year ago, carried by higher average realised oil prices coupled with favourable forex impact.
As for its gas segment, revenue surged 61.02% to RM137.62 billion from RM85.47 billion previously, on improved liquefied natural gas and processed gas average realised prices.
Petronas’ upstream segment’s revenue rose to RM158.18 billion as compared to RM104.43 billion, driven by higher average realised prices for crude oil and condensates and natural gas, favourable impact from forex as well as higher sales.
The corporate and others segment achieved a revenue of RM21.49 billion versus RM16.48 billion, mainly due to higher revenue recognition from the construction of an FPSO (floating, production, storage and offloading) unit and shipping-related income.
It closed the year with a fourth-quarter PAT of RM24.4 billion, up 55.41% from 4QFY2021's RM15.7 billion, as revenue rose 38.25% to RM105.9 billion from RM76.6 billion, underpinned by favourable price impact for all products, and higher sales volume.
Total assets strengthened 11.91% to RM710.6 billion as at Dec 31, 2022, as compared to RM635 billion a year ago, mainly contributed by higher cash and cash equivalents and property, plant and equipment.
“Sharehareholders’ equity of RM401.6 billion increased by RM50.8 billion mainly attributable to profit recorded during the year partially offset by dividends declared to shareholders amounting to RM50 billion.
“Gearing ratio decreased to 20.3% as at Dec 31, 2022, from 23.1% [a year earlier] primarily contributed by higher equity as mentioned above,” it said, adding that return on average capital employed improved to 19.9% from 11.4% on the back of higher profit recorded during the year.
Petronas president and group chief executive officer Datuk Tengku Muhammad Taufik Tengku Aziz attributed the group’s strong full-year performance to its workforce’s resilience.
“While 2022 enabled us to favourably capitalise on oil and gas upsides, last year also signalled heightened supply-demand volatility driven by sudden shifts in the market and an accelerated energy transition,” Muhammad Taufik said.
Fragile demand recovery, geopolitical issues warrant cautious outlook
Notwithstanding the record profit Petronas earned in FY2022, Muhammad Taufik warned that challenges that dominated the global O&G market last year continue to persist this year, which warrants the group's cautious outlook for 2023.
“We came out of 2022 on a very rocky road; the Europe crisis, supply chain disruption and Russian oil sanctions are expected to carry through 2023,” he said, adding that the looming possibility of recession and slow demand recovery are casting shadows on the robustness of the industry.
“The O&G industry could potentially see prices moderating in 2023, given an anticipated economic slowdown, even as it contends with prolonged market volatility. In this environment, Petronas will continue to drive operational excellence in its core business while it pursues its growth and sustainability targets,” he added.
Having said that, Muhammad Taufik is optimistic of the longer-term prospect for global energy demand, which is expected to grow and exceed pre-pandemic levels, as energy security concerns drive investments into production activities.
“Many other markets out there are highly dependent on O&G. Therefore, Petronas prioritises the delivery of energy from our core O&G portfolio,” he said.
At the same time, he reaffirmed Petronas' commitment to its net zero carbon emissions by 2050, saying the group will continue to make sufficient investments towards that.
In 2022, the group recorded greenhouse gas (GHG) emissions of 46.1 metric tons of carbon dioxide equivalent or MTCO2e, with its decarbonisation projects achieving a reduction of up to 0.6 MtCO2e from the previous year.
Since 2013, Petronas has reduced its GHG emissions by 18.1 MTCO2e, cumulatively, across its operations.