President and chief executive officer Datuk Shamsul Azhar Abbas warns that the second quarter would not be as good as crude oil prices trend lower.
KUALA LUMPUR: National oil firm Petroliam Nasional Bhd (Petronas) reported a 61.7 per cent rise in first-quarter net profit, buoyed by higher crude oil prices and the sale of its stake in UKbased Centrica plc.
Net profit came in at RM20.7 billion compared with RM12.8 billion in the same quarter a year ago.
Revenue grew by 14.6 per cent to RM75.2 billion.
Petronas in February sold its entire 3.9 per cent stake in Centrica, a power supplier, for about £590 million (RM2.9 billion).
President and chief executive officer Datuk Shamsul Azhar Abbas said the first-quarter performance came as a positive surprise for the group.
However, he warned that the second quarter would not be as good as crude oil prices trend lower, with a weakening European economy and the political instability in the Middle East hurting oil demand.
“We do not see much improvement (in the financial performance) from the first quarter going forward,” he told reporters at a results briefing here yesterday.
Shamsul said he was “fairly bearish” on oil prices and maintained an earlier projection that the benchmark Brent crude oil would average between US$80 and US$90 (RM254 and RM286) a barrel this year.
The price fell from an average of US$119(RM378) a barrel in the first quarter to about US$106 (RM337) yesterday.
The second quarter is also when Petronas will start taking a hit from having to halt some of its operations in Sudan over a dispute between the north and south regions of that country.
The halt means a loss of production of 130,000 barrels a day.
Shamsul isn’t optimistic that these operations will be able to start up again within the next six months.
As such, Petronas expects to take a RM3.2 billion hit on its bottom line for the full year, he said.
Shamsul said the company will, in a few days, announce the award of the next risk services contract for the development of marginal oil fields in Malaysia.
“It’s been approved by the board and now we need to get approval from the Ministry of Finance,” he said, adding that contracts for all six clusters would have been awarded by year-end.
Petronas, the biggest single contributor to the government’s revenue, will pay a lower dividend of RM28 billion for the 2011 financial year comprising nine months, compared with RM30 billion in the last few years, as it looks to preserve cash to boost production.
“Mind you, the government is aware of the need for Petronas to have our own funding for growth. They respect that,” Shamsul said.
It will start paying out 30 per cent of its net profit as dividends to the government starting from 2013.
Petronas, which had a cash balance of RM169.2 billion as at end-March, is scouting for merger and acquisition opportunities now with oil prices trending lower, he said.
Meanwhile, on whether Petronas had worked out its pricing mechanism for natural gas once the regasification terminal in Malacca comes into operation this year, it said it was waiting for the government to make an announcement on it.
“We have discussed with relevant parties in government and they said they’ve agreed to what we’ve proposed. But we’ll wait for their announcement,” said Datuk Anuar Ahmad, executive vice-president for the gas and power business.
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