Petroliam Nasional Bhd (Petronas) saw its net profit jumped for its financial year ended December 31, 2017 by 91 per cent at RM45.5 billion, compared to RM23.8 billion recorded in 2016.
The increase was achieved on the back of higher revenue, lower net impairment on assets and well costs and continuous efforts to optimise costs in 2017.
The Group’s revenue increased by 15 per cent to RM223.6 billion compared to RM195.1 billion recorded in 2016.
The increase was mainly attributed to higher average realised prices recorded for major products coupled with the effect of weakening of the Ringgit against the US Dollar.
This was partially offset by lower sales volume for crude oil & condensate and petroleum products.
Petronas president and group chief executive officer, Tan Sri Wan Zulkiflee Wan Ariffin said the modest recovery in oil prices coupled with intensive internal efforts to increase efficiency have contributed to PETRONAS’ strong 2017 performance.
“The sustainability of the current oil prices remains to be seen. The concern here is that costs are increasing due to a perceived recovery. If this trend is left unchecked, the industry as a whole runs the risk of negating the value we have gained from intensive cost-efficiency efforts over the last three years.
“It is imperative therefore, that we do not drop the austerity mind-set and continue to ensure we keep costs under control, increase efficiencies, and drive-up value,” he said
Total assets as at 31 December 2017 was however slightly lower at RM599.8 billion as compared to RM603.4 billion as at 31 December 2016 primarily due to the impact of the Ringgit strengthening against the US Dollar.
The group’s gearing ratio remained stable at 16.1 per cent compared to 17.4 per cent recorded last year. ROACE increased to 9.8 per cent compared to 5.4 per cent in 2016, in line with higher profits.
Capital investments for the year ended 31 December 2017 totalled RM44.5 billion, mainly attributable to the Refinery and Petrochemical Integrated Development (RAPID) Project in Johor.
The group also recorded an improved performance in the fourth quarter ended December 31, 2017, with revenue spiked to RM 61.8 billion, 14 per cent higher compared to the corresponding quarter last year and net profit increased by 61 per cent to RM18.2 billion from RM11.3 billion in the corresponding quarter last year.
This positive performance was largely driven by the upward trend of key benchmark prices and better margins.
On 2018 prospects, the group expects to deliver a satisfactory performance in this financial year subjects to sustainability of price recovery.