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PETALING JAYA: Petroliam Nasional Bhd (Petronas) posted a net loss of RM16.5bil in the first half ended June 30, 2020 due to deterioration and weaker oil prices.
The national oil company said this would affect its dividend payment to the government as it reported a net loss, in contrast to a net profit of RM28.9bil a year ago. “Excluding the impairment loss, the group would have recorded a net gain of RM7. 7bil ”, it said yesterday.
Its revenue fell 23%, to RM 93.6 billion from a year ago, RM 121.1 billion, mainly due to lower average realized prices for main products and lower sales volume mainly of petroleum products, natural gas liquefied (LNG) and processed gas.
For the first half of this year, the average for Brent crude was US $ 39.73 compared to US $ 66.02 a year ago.
In the second quarter, Brent crude averaged $ 29.20 a barrel compared to $ 68.83 a year ago.
Looking at the second quarter, its revenue fell 42% to RM34bil from RM59.1bil a year ago, while they oscillated in net loss at RM21bil in contrast to the net profit of RM14.7bil a year ago.
Petronas also said it was affected by the downward revision of the price outlook due to the current economic outlook and also the increasing pace of the energy transition.
Its performance reflected the uncertainties facing the oil and gas industry, compounded by weak demand caused by global lockdowns and movement restrictions, excess capacity and a fragile outlook for oil prices.
“The accelerated energy transition that sees the push towards a low-carbon economy is also expected to have a greater impact on the demand for natural resources,” Petronas said.
At a press conference yesterday, its chairman and chief executive of the group, Tengku Muhammad Taufik Tengku Aziz, warned that its financial performance for this year was expected to be affected by the low price of oil and the weak demand environment.
“The industry continues to operate in a challenging and unprecedented market environment that arises from a combination of severe destruction of demand due to the Covid-19 pandemic and global market glut,” he said.
Tengku Taufik said Petronas expected oil prices to be between $ 50 and $ 60 a barrel in the long term.
As for the dividends to be paid to the government this year, he said the company is likely to propose a lower payment.
He also said Petronas was committed to taking all necessary steps on its road to recovery, which would involve reshaping its portfolio mix, restructuring its human capital, and emphasizing focused execution with pace.
Assuring that there will be no cuts, he said final deliberations on the pay cuts were ongoing.
“Any decision on the matter will first be communicated to our employees,” he said.
Tengku Muhammad Taufik said Petronas will also pay more attention to its new energy business, where it has more than 50MWp of solar solutions under development, focusing on commercial and industrial clients. Petronas’ wholly owned subsidiary Amplus Energy Solutions has 660MWp of solar power. capacity in operation and development in India and Southeast Asia, with 448MWp put into service and the rest of 212MWp under development.
It plans to increase renewable energy production to three gigawatts in four years.
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