KUALA LUMPUR: Petroliam Nasional Bhd’s (Petronas) net profit dropped 27 per cent to RM40.5 billion for the year ended December 31, 2019 from RM55.3 billion recorded in 2018.
Petronas said this was primarily due to lower revenue as well as net impairment on assets amounting to RM7.3 billion.
Its revenue slipped four per cent to RM240.3 billion from RM251.0 billion in 2018, mainly due to lower average realised prices for major products.
The decrease was partially offset by the impact of higher sales volume, mainly for petroleum products and liquefied natural gas (LNG) coupled with the effect of the weakening of the ringgit against the US dollar.
“The year remained difficult as the industry continued to be marred by consistent and prolonnged volatility.
“Against this challenging landscape, Petronas had shown strong resiliency through its operational and financial performance for 2019.
“Our progress and achievements in pursuing our three-pronged strategy demonstrate our perseverance and robustness as an integrated energy company,” Petronas president and group chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin said.
For the fourth quarter (Q4), the group’s net profit stood at RM4.1 billion, down 71 per cent from RM14.3 billion, primarily due to impairment on assets and lower revenue.
Revenue in Q4 was eight per cent lower to RM64 billion from RM69.9 billion, due to lower average realised prices for major products.
Capital expenditure (capex) for Q4 2019 amounted to RM18.8 billion, attributed to upstream, gas and new energy, and downstream projects.
Capex for the year stood at RM47.8 billion.
Petronas said the outlook of the oil and gas industry remains bearish, given the ongoing geopolitical uncertainties, prolonged trade tension and near-term demand disruptions due to Covid-19 outbreak.
It expects its financial year performance for 2020 to be affected by these factors.
“Looking ahead, market volatility is expected to persist. We will remain steadfast in executing our strategies and sustaining our operational efficiencies while maintaining fiscal discipline.
“Our priority remain towards our commitment to deliver value to our stakeholders and ensuring Petronas’ long-term sustainability as we transition to a lower carbon future,” said Wan Zulkiflee.