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Kuala Lumpur, 16 November 2016 - PETRONAS’ third quarter 2016 earnings have shown improved performance from the preceding quarter in some key metrics despite prolonged market challenges, thanks to its group wide efforts to reduce costs, improve efficiency in cash management and sustain world-class operational efficiencies as well as lower net impairment on assets and well costs.
For the quarter that ended 30 September 2016, the company recorded a revenue of RM48.7 billion, a one per cent or RM0.3 billion increase compared to the preceding quarter.
Profit after tax (PAT) also rose from RM1.6 billion to RM6.1 billion, a significant improvement from the previous quarter. The increase primarily reflects lower net impairment on assets and well costs and higher average realised prices for most products. This was partially offset by lower sales volume for major products.
Meanwhile, earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter was RM15.2 billion, a 14 per cent decline from the preceding quarter mainly due to one-off cost for Floating Production Storage Offloading facility for Risk Sharing Contract early termination payment and higher net foreign exchange loss.
Cumulatively, PETRONAS’ PAT for the nine month period ended 30 September 2016 was RM12.3 billion, a 48 per cent decline compared to RM23.8 billion recorded the year before. This was posted on the back of RM146.3 billion revenue, which fell by 22 per cent from 2015. This was mainly due to the downward trend of key benchmark prices (Dated Brent and Japan Customs Cleared Crude (JCC)), higher net impairment on assets and well costs as well as lower sales volume of petroleum products, crude oil and condensates and processed gas.
Cumulative EBITDA was RM48.5 billion compared to RM56.3 billion during the same period last year.
Year-to-date cash flows from operating activities decreased from RM51.2 billion to RM36.1 billion, or 29 per cent compared to last year due to lower revenue recorded for the period as a result of the downward trend of prices.
The Group’s efforts to lower cost resulted in a nine per cent decline in year-to-date controllable cost to RM30.7 billion as compared to RM33.9 billion during the corresponding period last year.
Total assets decreased to RM581.3 billion as at 30 September 2016 compared to RM591.9 billion as at 31 December 2015 primarily due to the dividend payment to date of RM12.0 billion in respect of the financial year ended 31 December 2015 and movement in foreign currency translation reserves.
Shareholders’ equity was RM361.7 billion as at 30 September 2016, lower by RM13.2 billion compared to 31 December 2015. This was attributed to the approved RM16.0 billion dividend to the Government for the financial year ended 31 December 2015 and impact of weakening US Dollar exchange rate against the Ringgit.
Capital investments as at 30 September 2016 totalled RM35.9 billion, mainly attributed to the Refinery and Petrochemical Integrated Development project in Johor, domestic upstream capital expenditures and Sabah Ammonia Urea (SAMUR) project.
Total production volume for the year was 2,336 thousand boe per day, a slight increase from the corresponding period last year. This comprises Malaysia’s production (PETRONAS Group and other Operators) and PETRONAS Group’s international equity production. This was mainly due to resumption of operations of the Sabah-Sarawak Gas Pipeline, higher facilities uptime in Malaysia and Canada as well as higher production from Indonesia and Australia, partially offset by natural decline rate.
Total LNG sales volume for the same period was slightly lower compared to the corresponding period in 2015 mainly due to lower trading volume, partially offset by volumes from Gladstone LNG (GLNG). Malaysia’s cumulative average sales gas volume was lower by 22 mmscfd compared to the corresponding period last year mainly due to lower demand.
Despite the challenging industry outlook, Malaysia continues to attract upstream investments. Earlier in July 2016, PETRONAS awarded a Production Sharing Contract (PSC) to PTTEP HK Offshore Limited (PTTEP), KUFPEC Malaysia (SK-410B) Limited (KUFPEC) and PETRONAS Carigali Sdn Bhd for exploration Block SK410B in Sarawak.
The low prices across all products, namely crude, petroleum products and petrochemicals, coupled with the lower sales volume of crude and petroleum products, had impacted the cumulative revenue recorded by PETRONAS’ downstream activities for year to date 2016. Petroleum products sales volume was 203.3 million barrels, lower than the corresponding period last year by 11.0 million barrels due to overall reduction in marketing and trading activities. Crude oil sales volume was 146.1 million barrels, lower than the corresponding period last year by 15.5 million barrels due to lower trading activities, partially offset by more marketing activities.
Meanwhile, petrochemical products sales volume rose by 15 per cent or 0.7 million metric tonnes to 5.5 million metric tonnes compared to the corresponding period last year due to improved plant performance leading to higher production.
Downstream growth projects are on track. The Pengerang Integrated Complex (PIC) is 48 per cent in progress, while SAMUR has successfully produced on-specification urea and is progressively ramping up the plant for full commercial operations in Q4 of 2016.
Current oil price environment continues to pose significant challenges to the industry and the outlook remains uncertain. While performance in 2016 is affected, PETRONAS has been responsive with strong operational efficiency and financial discipline.
Media Relations Department
Group Strategic Communications