KUALA LUMPUR (June 7): Petroliam Nasional Bhd (Petronas) said it anticipates lower profitability for 2023 after the national oil firm's profit after tax (PAT) for its first quarter ended March 31, 2023 (1QFY2023) grew only 2% to RM23.8 billion from RM23.4 billion a year earlier.
The group's revenue for 1QFY2023 expanded 16% to RM90.4 billion from RM78.2 billion in 1QFY2022, largely due to improved sales volumes and favourable foreign exchange impact. Revenue growth, however, was partially offset by lower average realised prices from major products.
In a statement, Petronas said it is expecting lower profitability for the year as oil and gas prices are expected to moderate due to continued economic uncertainties. "Nevertheless, Petronas remains committed to strengthening its business activities, while pursuing its sustainability agenda."
According to Petronas, its 1QFY2023 PAT was a marginal RM0.4 billion higher than 1QFY2022's, due to higher interest income and lower taxation, in line with lower profit — partially offset by lower earnings before interest, taxation, depreciation and amortisation (Ebitda).
"The group recorded Ebitda of RM38.6 billion, lower by RM1.8 billion or 4% mainly due to higher product costs and operating expenditure partially negated by higher revenue," it said, compared with 1QFY2022's RM40.3 billion.
Compared with 4QFY2022, Petronas said its profit after tax dropped 2% from RM24.4 billion, as revenue fell 15% from RM105.9 billion. In 4QFY2022, Ebitda was RM40.6 billion.
The quarter-on-quarter PAT drop was in tandem with lower Ebitda, which in turn is in line with lower revenue — partially offset by lower product costs, favourable impact from foreign exchange, lower operating expenditure and cash payments, as well as higher share of profit from associates and joint ventures.
The group said its cash flows from operating activities stood at RM25.5 billion, down from RM27.9 billion in 1QFY2022, and halved from the RM52.1 billion it recorded in 4QFY2022, in line with lower cash from operations.
The group's capital expenditure (capex) amounted to RM10.5 billion in 1QFY2023, mainly contributed by upstream and gas projects. While higher than 1QFY2022’s RM7.4 billion, the capex is lower than 4QFY2022’s RM22.7 billion, Petronas said.
“Domestic capex increased by 44% against 1QFY2022, mainly for investments in the Petronas nearshore floating liquefied natural gas project in Sabah and the Kasawari gas field development in Sarawak,” it added.
As at March 31, 2023, the national oil company's total assets strengthened to RM713.6 billion from end-December 2022’s RM710.6 billion, mainly contributed by higher cash and cash equivalents, partially offset by lower receivables.
In the same period, shareholders’ equity decreased to RM388.7 billion from RM401.6 billion, mainly attributable to dividends declared to shareholders amounting to RM35 billion that was announced on Feb 23, and partially offset by profit recorded during the period.
Gearing ratio increased to 20.9% as at end-March 2023, from 20.3% as at end-December 2022, while return on average capital employed rose to 20.3% from 19.9% over a similar period.
Petronas president and group chief executive officer Tan Sri Tengku Muhammad Taufik said the group will remain cautious moving forward, as it focuses on prudent financial management and invests in strengthening its core and expanding its business portfolio.
“At all times, we will aim to grow value for our stakeholders and partners, with an unwavering commitment to ensuring the well-being of Malaysians and the communities wherever we operate,” he added.