KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) expects a weak energy market throughout the year due to the slow global economic activity, heading into the future.
President and group chief executive officer Tengku Tan Sri Muhammad Taufik said Brent crude oil will likely hover within the range of US$70 to US$80 per barrel in the next 12 months amid challenging and uncertain environment.
He added that the second quarter of 2023 saw Brent prices dropped to its lowest since the previous four quarters, as concerns over slowing global economic activities outweighed supply cuts.
"Despite contending in a lower-price environment and global economy slowdown, the group delivered commendable financial performance for the first half of 2023 (1H23).
"The group remains steadfast and resolute in delivering energy security responsibly, while pursuing its growth and sustainability agenda," he said during Petronas' 1H23 results announcement briefing yesterday.
Petronas net profit dropped 13 per cent to RM40.2 billion in the first six months ended June 30 2023, mainly due to lower average realised prices.
Group revenue dropped marginally to RM170.3 billion from RM 170.4 billion in the same period last year.
For the second quarter, Petronas said the net profit had fallen 29 per cent to RM16.4 billion from RM23.0 billiona year ago in tandem with the lower revenue of RM79.9 billion, a drop of 13 per cent.
Petronas' total assets strengthened to RM742.0 billion as at June 30 this year compared to RM710.6 billion as at Dec 31 2022.
Its shareholders' equity increased to RM410.0 billion compared to RM401.6 billion as at Dec 31 2022
Muhammad Taufik noted that despite the challenges, Petronas will intensify efforts towards building resilience to counter increasing headwinds.
He said this includes the efforts of increasing investments in core businesses while reducing carbon emissions by investing in cleaner energy to ensure the integrity of the group's portfolio, aligning with the energy transition strategy.
Meanwhile, Petronas approved an additional dividend of RM5 billion to be paid to the government, bringing the total dividend for this year to RM40 billion.
Group chief financial officer and executive vice president Liza Mustapha said the approval for the additional dividend was granted by the board in June.
In 2022, Petronas paid a total dividend of RM50 billion, including an additional dividend of RM25 billion.
According to Liza, the decisions regarding dividends are made based on the group's capability after considering operational needs, growth commitments, and financial obligations.
She noted that the dividend payouts are based on Petronas' capability, taking into account long-term expectations.
On Petronas' investments in new businesses and sources, Liza said the group intend to allocate an average of 20 per cent of capital expenditure (capex) for these segments over the next five years.