Petronas Q1 Profit Drops 68%

Malaysian state-run Petronas May 22 reported a 68% yr/yr drop in net profit for the three months to March 31 (Q1), owing to net impairment on assets and lower average realised product prices.

Profit after tax for the quarter stood at ringgit 4.5bn ($1.03bn) compared with ringgit 14.2bn posted in the corresponding quarter in the previous year. Revenue stood at ringgit 59.6bn, a 4% decrease from a year ago period, mainly attributable to the impact of lower average realised prices of LNG, petroleum products and crude oil and condensates.

Petronas has projected a bearish outlook for the year and said it is “operating in unprecedented market conditions driven by a combination of severe demand destruction due to Covid-19 pandemic and global oil market glut, which are testing the resilience of oil and gas players globally.”

In mitigating the negative impact on its profitability and liquidity, the company said it is taking steps to optimise its planned international capital investments and operating expenditures.

“While the group continues to invest domestically, it anticipates that there will be constraints in the supply chain as a result of the pandemic. The board expects the overall financial year performance will be significantly affected by these factors,” Petronas said.