SINGAPORE: Malaysia’s state-owned oil company Petroliam Nasional Bhd’s balance sheet can absorb negative discretionary cash flows of RM40 billion for two years before headroom under its ‘aa’ stand-alone credit profile starts to reduce, S&P Global Ratings said in a report.
S&P said the company’s solid balance sheet, sizable net cash position and liquidity provide ample buffer against payment of a one-off dividend to govt that could reach RM30 billion.
“Impact of a one-off dividend of this size is moderate for Petronas’ cash position and balance sheet quality,” the rating agency said.
It can finance this dividend, given cash and short-term equivalent of nearly RM180 billion ringgit as of June 30, 2018, it added.
S&P said Petronas will remain in a net cash position in 2019 and, depending on the pace of capital spending disbursement, in 2020 as well.
Its operating cash flows of at least RM80 billion in 2019 amid higher hydrocarbon prices, which are sufficient to fund capex that’s forecast at about RM55 billion and regular dividends to govt and minority interest estimated at about RM25 billion, it added.
It said special dividend does not affect Petronas’ solid liquidity as the company has minimal short-term debt maturities of about RM11.5 billion as of June 30, 2018, or less than 10 per cent its cash balance.