KUALA LUMPUR – Petroliam Nasional Bhd (Petronas) swung into the black for the fourth quarter (Q4) ended Dec31, 2016, registering a net profit of RM11.26 billion against a net loss of RM2.96 billion in the previous corresponding period, driven by lower net impairment on assets and production costs.

Revenue, however, contracted 2.5% from RM60.1 billion to RM58.6 billion, on the back of lower average realised product prices.

Brent crude prices averaged US$49.46 a barrel for Q4 compared with US$45.85 a barrel in Q3.

For 2016, Petronas’ net profit expanded 12.7% from RM20.86 billion to RM23.51 billion in the previous year on the back of a 17.3% rise in revenue from RM247.66 billion to RM204.91 billion. It made a total impairment on assets of RM12.9 billion in 2016.

Speaking at a press conference yesterday announcing the 2016 results, Petronas president and CEO Datuk Wan Zulkiflee Wan Ariffin said the outlook for the industry remains uncertain while maintaining his projection of an average oil price of US$45 a barrel this year.

“I’m not sure the worst is over or not, but we’re preparing ourselves for the uncertainties, especially in the second half,” he explained.

Petronas will pay RM13 billion in dividend to the government for 2017, as promised.

Zulkiflee said the company’s plans for capital expenditures investments have never been adjusted or disrupted because of dividends.

With a strong balance sheet, Petronas is not only confident on its ability to payout the committed amount, but also to cover all of its capital expenditure (capex), and is equipped with enough cash reserves to cover any additional expenditure that crops up.

The capex allotted for this year is RM 60 billion.

When asked if there will be any deferment in projects due to more stringent cost management, Zulkiflee said projects that have already been sanctioned, encompassing of 60% of the bulk expenditure for this year, will not be deferred.

Net profit for the upstream segment jumped 94% from RM1.7 billion to RM3.3 billion, with a total upstream production of 2.36 million barrels of oil equivalent (boe), 3% higher than the 2.29 million boe in 2015.

For the downstream segment, Petronas recorded a slight drop in net profit from RM8.4 billion to RM8.3 billion despite depressed market growth.

Zulkiflee said, the group will not undertake any major restructuring this year, but it will still be a high performing, merit-based organisation.

“If there is any optimisation of manpower this year, it will be based on performance. For non-performers, as usual, they have programmes for them which will result in outplacement.”

According to Zulkiflee, a total of 2,300 staff were affected under the headcount optimisation programme last year.

Going forward, he said, Petronas is open to more strategic partners for its Pengerang Integrated Complex, which is close to 60% completion as at February this year and is on track to commence operations by 2019.

Last month, Petronas sealed a deal with Saudi Aramco which will see the latter taking up a 50% stake in Rapid for US$7 billion (RM31 billion). Rapid CEO Sazali Hamzah was quoted as saying Petronas Chemicals Bhd was in talks with Asian and European petrochemical firms to invest in the project.

– Sundaily