Kuala Lumpur, 31 May 2019 – PETRONAS today announced a robust 2019 first quarter financial performance, as it pursued its three-pronged strategy to maximise cash generation, extend its value chain and step out into new ventures. The results were further supported by the Group’s continuous pursuit of operational excellence and fiscal discipline.
The Group recorded a revenue of RM62.0 billion for the first quarter of 2019, an increase of 7 percent from RM57.9 billion in the corresponding quarter last year. The revenue was driven by higher sales volume for petroleum products and LNG, coupled with the effect of the weakening Ringgit against the US Dollar exchange rate. These were partially offset by lower average realised prices, mainly for petroleum products, crude oil and condensates.
First quarter Profit After Tax (PAT) stood at RM14.2 billion, up by 9 per cent on the back of higher revenue, but partially offset by increased net product and production costs, lower net write-back of assets impairment and higher contribution to the National Trust Fund.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) registered a growth of 11 per cent to RM27.8 billion compared to RM25.0 billion in the corresponding quarter last year, in line with higher Profit Before Tax (PBT).
Cash flows from operations rose to RM23.2 billion, an increase of 6 per cent from RM21.9 billion in the same quarter last year.
Total assets decreased marginally to RM636.2 billion as at 31 March 2019 from RM636.3 billion as at 31 December 2018. Shareholders’ equity increased to RM389.1 billion compared to RM380.5 billion in the same period last year, primarily driven by profit generated during the period. However, this was partially offset by movements in the foreign currency translation reserve.
Gearing ratio increased to 20.8 per cent as at 31 March 2019 compared to 19.7 per cent as at 31 December 2018, as additional lease liabilities were recognised following the adoption of a new accounting standard, MFRS 16 Leases. Meanwhile, Return on Average Capital Employed (ROACE) increased slightly to 12.1 per cent from 12.0 per cent in the previous quarter, in line with the higher profit recorded.
The Group’s capital investment during the first quarter of 2019, was RM8.3 billion, mainly tributable to Upstream projects.
The oil and gas industry will continue to operate in a challenging environment arising from market uncertainties and geopolitical risks. The Group will maintain its efforts in instilling strong cost discipline and driving operational excellence in pursuit of its growth strategies. The Board expects the overall year end performance of PETRONAS Group to be affected by the rising volatility of oil price and foreign exchange movement.
Tan Sri Wan Zulkiflee Wan Ariffin, President and Group CEO PETRONAS
PETRONAS’ improved performance in the first quarter of 2019 compared to the same period last year demonstrates the strength of our three-pronged strategy and resolute execution focused on continuous overall business improvement as well as commercial and operational excellence.
Looking ahead, while facing market uncertainties, we will continue to invest for the future and have recently expanded our Upstream portfolio through our equity acquisition of the Tartaruga Verde field in Brazil. Our strategic intent to venture beyond oil and gas has also made significant progress with our recent investments in renewables and specialty chemicals.
Group Strategic Communications
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- For the first quarter of 2019, the Upstream business’ PAT was RM9.2 billion, lower than the RM10.2 billion in the same quarter last year, mainly due to the higher product cost and lower net write-back of impairment on assets, partially offset by the higher revenue recorded.
- Upstream achieved RM0.5 billion cost compression for the quarter, mainly due to resource optimisation and standardisation of processes across production sharing contracts (PSCs) in Malaysia as well as in International operations.
- Total production volume for the quarter was 2,430 thousand barrels of oil equivalent (boe) per day, slightly lower than the 2,461 thousand boe per day in the same quarter last year, mainly due to lower crude production from Iraq, partially offset by higher gas production from Turkmenistan.
- Total LNG sales volume for the quarter was at 8.45 million tonnes, above the 7.92 million tonnes in the corresponding quarter last year, mainly attributable to a higher volume from the PETRONAS LNG Complex (PLC) in Bintulu, Sarawak, and higher trading activities.
- Malaysia average sales gas volume was 2,962 million standard cubic feet per day (mmscfd), above the 2,806 mmscfd in the same quarter last year, mainly contributed by higher demand from the power sector in addressing low reliability of coal power plants. There was also a significant demand increase in the non-power sector as Gas Malaysia Berhad had started on its gas business expansion.
- PICL (Egypt) Corporation Limited (PICLE), a subsidiary of PETRONAS, jointly with BG Delta Limited, a subsidiary of Shell, through a 50:50 partnership, successfully acquired two offshore blocks, namely Mediterranean Block 4 of North Sidi Gaber and Block 6 of North El Fanar in Egypt, reinforcing PETRONAS’ Upstream portfolio in the Middle East.
- PETRONAS via its wholly-owned subsidiary PETRONAS Carigali Sdn Bhd (PCSB), successfully signed three new PSCs, namely for blocks PM407, PM415 offshore Peninsular Malaysia, and SB Block 3K offshore Sabah, as well as one operatorship transferred for deepwater Block R offshore Labuan.
- Seven projects achieved first hydrocarbon adding 48 thousand boe per day of new production, comprising six Brownfields in Peninsular Malaysia, Sarawak and Iraq, as well as one Greenfield (Unconventional) in the La Amarga Chica (LAC) area at Neuquén Province, Argentina.
- PETRONAS also made four exploration discoveries -- two in Malaysia and two internationally (Mexico and Indonesia).
- PETRONAS’ Floating Liquefied Natural Gas (FLNG) facility, PFLNG Satu, successfully relocated from the Kanowit field, offshore Sarawak, to the Kebabangan field, offshore Sabah. PFLNG Satu’s technology, featuring the capability to move from one location to another strengthens the reliability of PETRONAS’ LNG supply system to meet growing LNG demand.
- For the first quarter of 2019, Downstream business recorded PAT of RM1.9 billion, against RM2.0 billion in the same quarter in 2018.
- Overall Equipment Effectiveness (OEE) remains stable at 93.6 per cent across all business segments.
- Midstream business recorded strong operational performance, high plant reliability and healthy market demand.
- Petrochemical business sustained its Plant Utilisation above best-in-class, recording 94.5 percent, backed by strong operational excellence. Despite operational maintenance at selected plants, production volume stood at 2.6 million metric tonnes.
- The overall Marketing sales volume recorded a commendable performance at 6.3 billion litres. PETRONAS Dagangan Berhad recorded a three per cent overall sales volume increase compared to Q1 2018. Mogas volume alone increased by six per cent, primarily attributed to the launch of its new PETRONAS Primax 95 with Pro-Drive, which has attracted many positive testimonials from motorists with regards to the fuel’s smoothness, responsiveness and efficiency.
- As at 31 March 2019, the Pengerang Integrated Complex (PIC) recorded overall progress of 98.9 per cent.
- Work will be continued towards achieving planned commercial operation date (COD) in Q4 2019, although not at full capacity given the impact of the incident involving Train 2 of the Atmospheric Residue Desulphurisation (ARDS) unit of the refinery complex on 12 April. Investigations on the incident are still ongoing.