KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) is cautiously optimistic on its prospects in 2012, amid worsening economic conditions in Europe and the US, and expects crude oil prices to fall to US$70 (RM220) to US$75 per barrel.
Datuk Shamsul Azhar Abbas, Petronas president and CEO, said the current crude oil price is too strong for the market and expects it to fall from the current level of around US$110 per barrel.
“We are cautiously optimistic about next year. The situation in Europe and US is worsening while China is also showing signs of breaking. There is a possibility of a recession next year,” he said.
However, Shamsul said Petronas is on track to achieve its profit before tax (PBT) target of RM70 billion to RM75 billion for FY11 ending Dec 31. The company is changing its financial year-end to Dec 31 from March 31.
Petronas posted a net profit of RM18.35 billion for 2QFY11 ended September, up 54.4% from the RM11.88 billion a year earlier underpinned by improved margins.
Its revenue grew 26% to RM71.8 billion, from RM56.99 billion a year earlier on the back of higher realised prices of crude oil and condensates and other energy commodities, particularly petroleum products and liquefied natural gas (LNG).
“The second quarter results have been excellent and were beyond expectations. We should be able to meet our PBT target based on current market conditions,” said Shamsul.
It posted a 47% higher operating profit of RM27.11 billion compared with RM18.44 billion a year earlier.
For the six-month period ended Sept 30, 2011, Petronas’ net profit grew by 50.8% to RM40 billion from RM26.51 billion a year earlier. Revenue rose 25.3% to RM144.8 billion from RM115.54 billion on the back of higher realised prices of petroleum products, crude oil and condensates, LNG and petroleum products.
The national oil company said its total assets increased from RM439 billion as at March 31, 2011 to RM472 billion following the profit generated during the quarter, net of dividend distributed to shareholders.
Total debt to total asset ratio remains at 0.11 times. During the period ended Sept 30, 2011, it paid a third interim dividend of RM6 billion for the financial year ended March 31, 2011. It also paid a tax-exempt final dividend of RM22 billion between June and Nov 2011. It declared and paid a first interim dividend of RM2 billion for the financial period ending Dec 31, 2011.
Datuk George Ratilal, executive vice-president for finance, noted that Petronas will have a dividend payout amounting to 30% of its net profit for the next two years.
Shamsul said Petronas’ growth agenda remains intact to meet rising long-term demand for oil and gas. He said its capital expenditure of RM300 billion for the next five years is still intact, and it is committed to spend RM30 billion in the current calendar year.
Shamsul said these investments are vital for Petronas to increase its upstream and downstream activities in order to ensure sufficient gas and petrol supply.
Wee Yiaw Hin, executive vice-president of exploration and production, said the company has put in a bid for an onshore energy field in Myammar.
“There has been a bid for the onshore block and we are looking at opportunities. We currently have an offshore operation and the business has been good,” he said.
He added that the company will be bidding for the onshore block with its offshore partner.
This article appeared in The Edge Financial Daily, December 2, 2011.
Datuk Shamsul Azhar Abbas, Petronas president and CEO, said the current crude oil price is too strong for the market and expects it to fall from the current level of around US$110 per barrel.
“We are cautiously optimistic about next year. The situation in Europe and US is worsening while China is also showing signs of breaking. There is a possibility of a recession next year,” he said.
However, Shamsul said Petronas is on track to achieve its profit before tax (PBT) target of RM70 billion to RM75 billion for FY11 ending Dec 31. The company is changing its financial year-end to Dec 31 from March 31.
Petronas posted a net profit of RM18.35 billion for 2QFY11 ended September, up 54.4% from the RM11.88 billion a year earlier underpinned by improved margins.
Its revenue grew 26% to RM71.8 billion, from RM56.99 billion a year earlier on the back of higher realised prices of crude oil and condensates and other energy commodities, particularly petroleum products and liquefied natural gas (LNG).
“The second quarter results have been excellent and were beyond expectations. We should be able to meet our PBT target based on current market conditions,” said Shamsul.
It posted a 47% higher operating profit of RM27.11 billion compared with RM18.44 billion a year earlier.
For the six-month period ended Sept 30, 2011, Petronas’ net profit grew by 50.8% to RM40 billion from RM26.51 billion a year earlier. Revenue rose 25.3% to RM144.8 billion from RM115.54 billion on the back of higher realised prices of petroleum products, crude oil and condensates, LNG and petroleum products.
The national oil company said its total assets increased from RM439 billion as at March 31, 2011 to RM472 billion following the profit generated during the quarter, net of dividend distributed to shareholders.
Total debt to total asset ratio remains at 0.11 times. During the period ended Sept 30, 2011, it paid a third interim dividend of RM6 billion for the financial year ended March 31, 2011. It also paid a tax-exempt final dividend of RM22 billion between June and Nov 2011. It declared and paid a first interim dividend of RM2 billion for the financial period ending Dec 31, 2011.
Datuk George Ratilal, executive vice-president for finance, noted that Petronas will have a dividend payout amounting to 30% of its net profit for the next two years.
Shamsul said Petronas’ growth agenda remains intact to meet rising long-term demand for oil and gas. He said its capital expenditure of RM300 billion for the next five years is still intact, and it is committed to spend RM30 billion in the current calendar year.
Shamsul said these investments are vital for Petronas to increase its upstream and downstream activities in order to ensure sufficient gas and petrol supply.
Wee Yiaw Hin, executive vice-president of exploration and production, said the company has put in a bid for an onshore energy field in Myammar.
“There has been a bid for the onshore block and we are looking at opportunities. We currently have an offshore operation and the business has been good,” he said.
He added that the company will be bidding for the onshore block with its offshore partner.
This article appeared in The Edge Financial Daily, December 2, 2011.
