Petronas posts RM21bil net loss in Q2, revenue 42pct lower

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) registered its quarterly net loss at RM21 billion in the second quarter (Q2) ended June 30 2020, dragged by huge impairments on assets.

In the same quarter last year, the national oil company posted RM14.7 billion net profit.

Petronas president and group CEO Tengku Muhammad Taufik Tengku Aziz during the First Half 2020 Group Financial Performance at a Press Conference. Conference at Kuala Lumpur Convention Centre. –NSTP/ASWADI ALIAS

Excluding the impairments, Petronas said it would record RM7.7 billion net profit.

Group revenue for the quarter under review dropped 42 per cent to RM34 billion from RM59.1 billion recorded in Q2 2019.

This was mainly due to lower average realised prices for major products and lower sales volume especially from petroleum products, LNG (liquefied natural gas) and processed gas.

Petronas president and group chief executive officer Tengku Muhammad Taufik said the industry was also challenged by the downward revision of price outlook on the back of the current macroeconomic landscape combined with the growing pace of energy transition.

He said this had led to sizable impairments recognised during the period.

“Petronas has endured a very challenging first half of the year and we expect our performance to be affected by the volatility of oil prices which continues to be exacerbated by the uncertainties brought about by the ongoing Covid-19 pandemic.

“We are committed to undertaking all necessary measures in our path to recovery which will involve reshaping our portfolio mix, retooling our human capital equation and emphasising on focused execution with pace,” he said at a briefing on Petronas’ interim results here today.

Tengku Muhammad said anchored on its three-pronged growth strategy, Petronas would continue to strengthen its resilience and long-term sustainability as a progressive energy and solutions partner enriching lives for a sustainable future.

For the first six months, Petronas posted RM16.5 billion net loss due to lower revenue and impairment loss.

This is against the net profit of RM28.9 billion recorded in the same period last year.

Earnings before interest, tax, depreciation and amortisation (Ebitda) in 1H stood at RM29.4 billion, a 46 per cent drop from RM54.7 billion.

Its revenue in the first half declined 23 per cent to RM93.6 billion from RM121.1 billion a year ago.

This was largely driven by lower average realised prices for all products and lower sales volume mainly from processed gas and LNG.

Petronas said during the second quarter, Brent prices continued to slide with the dated Brent averaging US$29.20 per barrel compared to US$68.83 per barrel in Q2 2019.

For 1H, the dated Brent average was US$39.73 per barrel, compared to US$66.02 per barrel in the previous corresponding period.

On its outlook, Petronas said the industry continued to operate in a challenging and unprecedented market environment arising from a combination of severe demand destructions due to the Covid-19 pandemic and global oil market glut.

“Petronas will continue to intensify its efforts to protect revenue together with cost optimisation to mitigate the negative impact on its profitability and liquidity.

“The board expects its 2020 performance to be severely affected by the low oil price and weak demand environment,” it added.

By : Farah Adilla – NST

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