Malaysia’s state oil company Petroliam Nasional Bhd. reported a 29% drop in the second-quarter net income compared to last year, as energy prices retreated from last year’s surge.
(Bloomberg) — Malaysia’s state oil company Petroliam Nasional Bhd. reported a 29% drop in the second-quarter net income compared to last year, as energy prices retreated from last year’s surge.
Petronas recorded a net-profit of 16.4 billion ringgit ($3.5 billion) in the three months ended June, down from 23 billion ringgit a year earlier, the company said in a statement on Wednesday. Revenue declined 13% to 79.9 billion ringgit.
Petronas followed global oil majors from Saudi Aramco to Shell Plc. in reporting a drop in profits as crude prices retreated from last year’s highs, when commodity markets were roiled by Russia’s invasion of Ukraine. Energy markets are expected to stay bearish for the remainder of the year amid a slowdown in global economic activity, Chief Executive Officer Muhammad Taufik said.
The company “will double-down on building resilience in order to deliver long-term sustainable value” despite near term challenges, he said at an earnings briefing in Kuala Lumpur.
Petronas will pay a dividend of 40 billion ringgit to the government this year, which includes an additional 5 billion ringgit payout approved in June, Chief Financial Officer Liza Mustapha said at the briefing. The company is wholly owned by the Malaysian government, which relies on its dividend to boost national coffers.
CEO Taufik said that it is “evidently clear” that Petronas needs to have more funds and liquidity on hand to invest in energy transition technologies without hampering its financial performance. “We have to set aside buffers aside from our cash balance so we can continue business as usual,” he said.
Excerpts from the briefing:
- Petronas’ profitability “remains resilient” in line with its peers, CFO Liza said
- The company has decided to close a section of its Sabah-Sarawak gas pipeline on safety grounds after a fire incident last year killed one person
- The concerned parcel is near Lawas, Sarawak, Taufik said, while assuring that Petronas “does not expect disruptions” to its deliveries
- Petronas’ renewable energy arm Gentari has 2GW of capacity in operation or under development to date
(Updates with excerpts from earnings briefing)
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