Petronas net profit fell marginally to RM11.88bil in the second quarter ended Sept 30 from RM11.97bil a year ago due to higher taxation but the group is optimistic of its outlook.
President and chief executive officer Datuk Shamsul Azhar Abbas said Petronas hoped to achieve a pre-tax profit of about RM80bil for the full financial year ending March 31, 2011 (FY11).
The national oil company posted a pre-tax profit of RM67bil in FY10.
Moving forward, if the same environment prevails until the financial year ends in March ... then easily we will beat last year's results, he said at a briefing to announce the group's quarterly results.
Nevertheless, Shamsul cautioned that the world's economy remained fragile and would have an impact on energy demand.
From left: Petronas executive vice president (Finance) Datuk George Ratilal, Petronas executive vice president (Gas and Power) Datuk Anuar Ahmad and Petronas president and chief executive officer Datuk Shamsul Azhar Abbas.
We are cautious but if the same economic environment prevails, I reckon we can beat last year's results.
Our third quarter performance is looking extremely good, especially based on current oil prices. However, we think comfortable levels for oil prices should be between US$70 and US$75 per barrel, based on fundamentals, he said.
According to its financial report, Petronas' tax expenses for the second quarter amounted to RM6.33bil.
The group's revenue for the quarter jumped 10.3% to RM57bil from RM51.7bil previously mainly due to higher realised prices of crude oil, condensates and energy commodities like liquefied natural gas (LNG).
Benchmark crude prices recovered over the period, with Dated Brent increasing by 12.6% to US$76.86 per barrel and West Texas Intermediate improved by 11.5% to US$76.04 per barrel while Tapis Official Selling Price rose to US$77.70.
Stronger oil prices in the second quarter were mirrored in the increase of prices in other energy commodities, particularly LNG, which surged by 46.5% to US$9.10 per mmbtu.
For the second quarter, Petronas's pre-tax profit grew 9.6% to RM18.2bil on the back of enhanced operational efficiencies and cost optimisation initiatives.
Its gross profit margin remained stable for the period at 37.7% against 37.1% a year ago while return on revenue stood at 31.9%.
For the six months ended Sept 30, Petronas' net profit jumped 18.8% to RM26.5bil from RM22.3bil previously.
It recorded a17.7% growth in revenue to RM115.5bil for the six-month period compared with RM98.2bil previously on higher realised prices of petroleum products and crude oil as well as improved sales volume of LNG, petrochemical products and natural gas.
Petronas paid a dividend amounted to RM30bil in FY10. The group expects to maintain a similar dividend for FY11. However, the payment will be dependent upon Petronas' growth requirements.
Exploration and production gross revenue grew 18.5% to RM20.5bil from RM17.3bil a year ago, driven by higher entitlement for natural gas and crude prices. Operating profit from the division grew 7.1% to RM10.6bil from RM9.9bil previously.
Gas and power contributed RM16.1bil to gross revenue, up 45% from last year due to higher realised prices and volumes sold for LNG as well as improvements in average sales gas delivery.
Meanwhile, its downstream operations' revenue dropped 6.2% to RM29.6bil from RM31.6bil previously due to stronger ringgit against the US dollar and lesser crude oil trading volume on the back of lower trading activities.
Going forward, Shamsul said the appreciation of ringgit remained a challenge for the group as Petronas operated mainly in US dollars.
He added that the group also needed to prop up its production, which had dropped compared with last year. We're lucky that the lower oil production is compensated by higher oil prices, he said.
To a question, Shamsul said the Petronas currently working in progress with the Economic Planning Unit and the Performance Management and Delivery Unit (Pemandu) to revise gas prices to be market-driven. However, he did not comment further.
As at Sept 30, a total of RM10.22bil in subsidies were borne by Petronas.
Earlier, Prime Minister Datuk Seri Najib Tun Razak announced several tax incentives, including a reduced income tax of 25% for marginal oil field development, to spur exploration and production of oil and gas in the country.
Shamsul said the incentives would boost Malaysia's average oil recovery rate to 30% from 26% now.
He said it would help to unlock some 1.7 billion barrels of oil in the country over the next 15 to 20 years.
