PETRONAS POSTS HIGHER Q3 FY2018 EARNINGS
KUALA LUMPUR, 27 November 2018 – PETRONAS posted higher earnings for the third quarter ended 30 September 2018, attributed to the Group’s continuous execution of business improvement activities, focused on increased operational excellence and supported by higher commodity prices.
The Group’s revenue for the third quarter of 2018 was RM63.9 billion, up by 19 per cent from the corresponding period in 2017, mainly driven by higher average realised prices for key products coupled with increased efficiency throughout the Group. These were partially offset by the effect of the strengthening of the Ringgit against the US Dollar exchange rate and lower sales volume mainly for LNG.
Profit After Tax (PAT) increased by 43 per cent to RM14.3 billion from RM10.0 billion in the corresponding quarter last year, primarily due to higher revenue. This was partially offset by higher product costs in tandem with higher prices, coupled with increased depreciation and amortisation.
Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA) registered a 25 per cent growth to RM26.9 billion, from RM21.5 billion in the third quarter of 2017.
Capital investments for the quarter was RM6.7 billion, mainly attributed to Upstream projects.
For the cumulative period ended 30 September 2018, PETRONAS Group recorded a 12 per cent increase in revenue at RM181.1 billion, mainly due to the impact of higher average realised prices for key products as well as increased efficiency efforts, largely offset by the effect of the strengthening of the Ringgit against the US Dollar exchange rate.
PAT for the first nine months of 2018 increased by 50 per cent to RM41.0 billion from the same period in 2017. The improved performance was primarily due to higher revenue, lower net impairment on assets as well as other expenses. These were partially offset by higher product costs in tandem with higher prices coupled with increased depreciation and amortisation as well as tax expenses.
Capital investments for the period was RM26.5 billion, mainly attributed to Upstream projects in support of the Group’s operational excellence and growth strategies.
Total assets increased to RM623.1 billion as at 30 September 2018, compared to RM599.8 billion as at 31 December 2017.
Shareholders’ equity rose to RM402.1 billion as at 30 September 2018, compared to RM389.8 billion as at 31 December 2017, mainly contributed by profit generated during the period on the back of ongoing operational improvements and better commodity prices.
As at 30 September 2018, gearing ratio remained at 16.1 per cent while Return on Average Capital Employed (ROACE) increased to 12.6 per cent from 9.8 per cent as at 31 December 2017, in tandem with higher profit.
The Board expects that the Group’s performance to show an improvement compared to the previous financial year. Even as the Group contends with more volatile prices, continuous efforts will be pursued to deliver operational excellence.
Tan Sri Wan Zulkiflee Wan Ariffin, President and Group CEO PETRONAS
“PETRONAS continues to record another strong quarterly performance, which has further strengthened our financial position. The improved results are driven by ongoing operational improvement efforts throughout the group and supported by improved oil prices during the period.
PETRONAS is on track to deliver a strong year-end performance by maintaining our focus on driving efficiency efforts across all our operations. The recent drop in oil prices demonstrate the volatile and cyclical nature of the industry and we will continue to maintain our prudent outlook amidst this landscape while remaining steadfast in pursuing our growth strategies to ensure the long-term sustainability and progress of the company.”
Group Strategic Communications
- Total production volume was 2,313 thousand boe per day for the first nine months of 2018 as compared to 2,296 thousand boe per day in the same period in 2017, mainly due to higher liquid production.
- Malaysia average sales gas volume was 2,767 mmscfd, higher by 27 mmscfd as compared to the same period in 2017 mainly due to higher demand.
- Meanwhile, total LNG sales volume was 20.79 million tonnes, lower by 1.12 million tonnes as compared to the same period in 2017 mainly attributable to lower volume from LNG plants.
- PETRONAS has successfully secured 6 LNG business deals YTD, which contribute 3.68 million tonnes per annum to our business portfolio.
- The Sabah Sarawak Gas Pipeline (SSGP) is currently undergoing a period of pipeline testing to ensure the completion of intensive pipeline repair works that took place pursuant to the SSGP parted incident in January 2018. Consequentially, the testing activities have resulted in gas delivery to the Bintulu PETRONAS LNG Complex (Bintulu PLC) at a steady rate of up to 300 mmscfd since early October 2018.
- PETRONAS recently introduced fiscal terms enhancements for new Malaysian Deepwater Production Sharing Contracts (DW PSC). The fiscal terms enhancements, centered on self-adjusted cost recovery and profit sharing mechanism based on revenue over cost index, are aimed at complementing PETRONAS’ promotional efforts to attract new exploration investments and to open new exploration plays in Malaysia. The enhanced fiscal terms are currently on offer for application into new Malaysian DW PSC awards.
- Aligned with PETRONAS’ growth strategy, PETRONAS together with its joint venture participants (Shell, PetroChina, Mitsubishi & KoGas) has taken a final investment decision (FID) for 25% participating interest in LNG Canada, a major liquefied natural gas (LNG) project in Kitimat, British Columbia, Canada. LNG Canada will initially consist of two LNG liquefaction processing units referred to as “trains,” for a total of approximately 14 million tonnes per annum. To date, PETRONAS and its North Montney joint venture partners, are one of the largest natural gas resource owners in Canada with over 52 Tcf of reserves and contingent resources.
- The Overall Equipment Effectiveness (OEE) was recorded at 93.6 per cent for the first nine months of 2018, compared to 94.0 per cent in the same period last year, across all business segments. Domestic refineries and the refinery in Durban, South Africa, recorded an OEE of 91.2 per cent and 94.4 per cent respectively. The Petrochemical plants recorded a slightly higher OEE of 89.7 per cent, compared to 88.6 percent in the same period last year, with PGB recording an OEE of 99.2 per cent.
- The Petrochemical business recorded Plant Utilisation rate of 91.2 per cent with an overall production volume of 7,736 kMT, which is 3 per cent higher compared to 7,493 kMT in the same period last year, contributed by healthy feedstock and improved plant performance.
- Marketing business recorded a 3 per cent volume improvement since the last quarter, contributed by both domestic and international retail operations.
- Malaysian Refining Company Sdn Bhd (MRCSB) is upgrading its refinery configuration for the Diesel Euro 5 expansion with a total capital investment of RM1.5 billion. The refinery is now producing 30,000 barrels of Diesel Euro 5 per day, and is preparing for a higher production volume of 126,000 barrels of Diesel Euro 5 per day upon project completion in 2020.
- As at September 2018, the Pengerang Integrated Complex (PIC) has achieved 95 per cent progress and successfully received its first crude oil cargo at the Pengerang Deepwater Terminal 2 (PDT2). PIC is currently approaching its commissioning stage and remains on track to achieve ready for startup (RFSU) in 2019.