Petronas: A good run in Q1

Petronas registered a net profit of RM21.7 billion in the first quarter ended June 30 2011 on higher crude oil prices


Kuala Lumpur: Petroliam Nasional Bhd's (Petronas) net profit surged almost 50 per cent in the first quarter ended June 30 2011 on higher crude oil prices but it warned that the weak global economy could hit its full-year profits.

The national oil company registered a net profit of RM21.7 billion during the period, up by 48.6 per cent from RM14.6 billion recorded during the same quarter a year earlier.

Group revenue rose 24.6 per cent to RM73 billion.

"In a nutshell, the first quarter was quite a good run for Petronas," its president and chief executive officer Datuk Shamsul Azhar Abbas told a media conference here yesterday.

Shamsul Azhar said the group was helped by an average price per barrel of oil of US$122.26 (RM367) in the quarter compared with US$76.14 (RM228) in the January-March period, adding that the turmoil in the Middle East and North Africa helped push the prices.

He warned that the outlook for the rest of financial year was challenging because of the weak global economy.

"Based on July numbers, we are definitely going towards a slowdown. We had a good run (in the first quarter) and I think the party is over.

"We are moving into a slowdown and I think this will continue into next year," he said, adding that demand will be hurt by near-stagnant economic growth in the US and the possible resumption in the coming months of oil supplies from Libya.

Shamsul Azhar expects the oil price to hover around US$80 to US$85 (RM240 to RM255) per barrel in 2012.

Given such a scenario, he said profit from April 1 to December 31 this year will range between RM60 billion and RM70 billion.

"Last year, comparable to nine months last year, our pre-tax profit was RM60 billion and for the first quarter, we registered about RM30.9 billion, which is half of what we got in the ninth months of last year.

"So, moving forward, based on the number in July and the global economic weakness, I will be glad if we can end up with a profit of between RM60 billion and RM70 billion," he said.

Petronas will end its accounting period in December 2011 to allow its new financial year to start in January 2012.

Petronas' total assets increased from RM439 billion as at March 31 2011 to RM449.2 billion on the back of the profit generated during the quarter, net of dividend distributed to the shareholders.

"Total debt to total assets ratio remains at 0.11 times. Return on average capital employed (ROACE) increased to 24.4 per cent as at June 30 2011 in line with higher earnings recorded during the quarter," he explained.

Overall, Shamsul Azhar said Petronas' balance sheet remains healthy with property, plant and equipment and total assets growing at 2.4 per cent and 2.3 per cent, respectively.

He ruled out any possibility of raising fund at the current point of time to finance its development programmes.

"At this point of time, I think we have fairly strong cash from operations. I don't think we are in the need to go into the market to get financing. We are happy with the situation now," he said.