Kuala Lumpur, 8 March 2019 – PETRONAS today announced a strong performance for its financial year ended 31 December 2018, contributed by the Group’s continuous focus on fiscal discipline and operational excellence while improving efficiencies, despite a volatile market.
The Group’s revenue increased by 12 per cent to RM251.0 billion compared to RM223.6 billion in the financial year ended 31 December 2017, mainly due to higher average realised prices for all key products. The increase was partially offset by the effect of the strengthening of the Ringgit against US Dollar exchange rate, coupled with the impact of lower sales volume, mainly for LNG.
PETRONAS’ Profit after Tax (PAT) rose by 22 per cent in 2018, to RM55.3 billion, compared to RM45.5 billion in 2017, on the back of higher revenue and supported by net write-back of impairment on assets. These were partially offset by higher net product and production costs, depreciation and amortisation as well as tax expenses.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for 2018, increased by 27 per cent to RM116.5 billion, from RM92.0 billion in 2017, in line with higher Profit Before Tax (PBT).
Cash flows from operating activities improved to RM86.3 billion, an increase of 14 per cent from RM75.7 billion in 2017.
Total assets increased to RM636.3 billion as at 31 December 2018, compared to RM599.8 billion recorded in 2017.
Shareholders’ equity stood at RM380.5 billion, a decrease of RM9.3 billion compared to 2017. The profit generated in 2018 was offset by dividends declared during the year.
Return on Average Capital Employed (ROACE) increased to 12.0 per cent compared to 9.8 per cent in 2017, reflecting the higher profit generated during the year.
Gearing ratio increased to 19.7 per cent as at 2018, compared to 16.1 per cent as at 2017, arising from additional provision for the decommissioning of assets following the revision of estimated abandonment costs for oil and gas properties, coupled with lower shareholders’ equity.
Capital investments for 2018, amounting to RM46.8 billion, was mainly attributed to Upstream projects in support of the Group’s operational excellence and growth strategies.
For the fourth quarter of 2018, the Group’s revenue rose to RM69.9 billion, 13 per cent higher compared to RM61.8 billion in the fourth quarter of 2017, mainly due to the impact of higher average realised prices for all key products. However, this was partially offset by the impact of lower sales volume, mainly for LNG.
PAT stood at RM14.3 billion, a decrease of 21 per cent compared to RM18.2 billion in the fourth quarter of 2017, primarily due to higher product costs, depreciation and amortisation as well as petroleum proceeds.
EBITDA increased by 47 per cent to RM37.3 billion, compared to RM25.3 billion in the fourth quarter of 2017, mainly due to higher average realised prices.
Similarly, cash flows from operating activities increased by 68 per cent to RM30.1 billion as compared to RM17.9 billion in the fourth quarter of 2017.
Capital investments for the fourth quarter of 2018, amounted to RM20.3 billion, mainly attributed to growth projects for Upstream business.
OutlookThe oil and gas industry will continue to operate in a challenging environment arising from market uncertainties and geopolitical risks. Despite these challenges, the Group will continue to focus on its operational excellence and growth strategies. The Board expects the financial performance for 2019 to be affected by the movements in prices.
Tan Sri Wan Zulkiflee Wan Ariffin, President and Group Chief Executive Officer, PETRONAS
“PETRONAS has recorded a strong financial performance in 2018, supported by our ongoing drive to increase operational efficiency and commercial excellence. We have made progress in the pursuit of our long-term strategies and continue to invest for the future.
The oil price is expected to remain volatile in 2019, and uncertainty in various fronts will have a significant impact on prices. For the year ahead, we will remain focused on driving high performance, efficiency and operational excellence and continue to deliver value to our stakeholders and ensure PETRONAS’ long-term sustainability. Looking beyond the horizon, many external challenges will require us to remain agile and continue with our efforts to strengthen our organisation.”