PETALING JAYA: Volatility in the global oil markets has pushed Petron Malaysia Refining & Marketing Bhd (formerly known as Esso Malaysia Bhd) into a loss-making position during the second quarter (Q2) ended June 30, 2012.
The petrol refiner and retailer reported a net loss of RM75.1mil for Q2'12, compared with a net profit of RM1.8mil for the corresponding period last year.
Loss per share was 27.80 sen, compared with an earnings per share of 0.70 sen previously. In a statement, Petron explained that the reference prices for crude oil and finished products dropped steeply and continuously during the period leaving negative margins on higher-costing inventory sold in the second quarter.
Petron's revenue for Q2'12 totalled RM2.85bil, compared with RM3.06bil for Q2'11. The company said that sales volume decreased to 7.4 million barrels in the second quarter from 7.9 million barrels over the same period last year.
“Oil companies around the world were not spared from the effects of the steep drop in crude oil and product prices,” Petron chairman and CEO Ramon S. Ang said.
On its future prospects, Petron conceded that the fragile global economy on the back of an expected slowdown in economic growth and the continued crude and product prices volatility would have an impact on its potential earnings.
It would therefore focus on sustaining flawless operations, cost control and product and services quality, as well as strengthening its business position through continued emphasis on strategic programmes and initiatives to ensure the company's growth and profitability over the long term.
“Despite these external challenges, we remain focused on our initiatives to help ensure Petron Malaysia's growth and profitability moving forward,” Ang said. Petron has recently started formal studies on the possible improvements to the Port Dickson refinery.
An initial investment of around US$100mil (RM312.3mil) would have to be made to comply with Eyro-IV fuel specifications that would take effect from 2015.
Other possible upgrades will become clearer once technical studies are completed.
“Our investments in Malaysia are directed by a long-term view of the country's continuing economic growth. We are optimistic about our prospects and will continue to focus on building the business,” Ang said.