Malaysia's Petronas profit down 47% on oil weakness

GMT 12:46 2015 Friday ,14 August

Arab Today, arab today Malaysia's Petronas profit down 47% on oil weakness

Malaysia's Petronas
Kuala Lumpur - AFP

Malaysian state energy firm Petronas said Friday its second-quarter profit plunged 47 percent, warning of "unrelenting" difficulty as lower world oil prices hit the company's bottom line.

Net profit at Malaysia's only Fortune 500 company for the three months ending June 30 fell to 11.1 billion ringgit ($272.2 million), compared to 21.06 billion ringgit in the same period last year.

"Petronas is bracing itself for more challenges ahead as low oil prices persist," Wan Zulkiflee Wan Ariffin, Petronas president and CEO, said in a statement.

"Overall, it has been an unrelenting difficult period," he added.

The news marks the fourth straight quarter of either weakening year-on-year sales growth or outright losses.

The company posted a $2.02 billion loss in the fourth quarter of 2014, its first since launching quarterly earnings reports five years before.

Petronas is the single largest source of Malaysian government revenue and national export earnings, and its declining fortunes will add to concerns over the economic prospects of a country heavily dependent on oil exports.

Growth is slowing, and the ringgit currency is daily plumbing 17-year lows due largely to the fears over the rout in oil prices, which hit a fresh six-year nadir in US trading on Thursday.

"Petronas does not foresee a reprieve from the low oil prices in the near future," Wan Zulkiflee said.

Revenue tumbled 28 percent to 61.30 billion ringgit during the second quarter.

Wan Zulkiflee painted a grim picture going forward, saying cash flow this year was not expected to meet capital expenditure plans or dividend commitments.

"This means that we will have to persevere with more austerity measures," he said.

The company has in recent months outlined austerity measures such as deferring some key projects.

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