The drop in net income was “primarily due to the deconsolidation of subsidiaries and higher taxation”
Malaysia’s national oil company Petroliam Nasional posted a 19 per cent decline in first-half net income due to higher taxes and a shrinking of its asset base.
Petronas recorded net income of RM32.4 billion (S$9.72 billion) in the six months ended June, down from RM40.2 billion in the same period a year earlier, according to a statement on Thursday (Sep 5). Revenue rose 2 per cent to RM171.7 billion, mainly due to foreign exchange gains, although a drop in liquefied natural gas prices was a drag.
The drop in net income was “primarily due to the deconsolidation of subsidiaries and higher taxation,” the company said. Profits have been under pressure in recent earnings periods after energy prices retreated from their 2022 surge caused by Russia’s invasion of Ukraine.
This time around, the company encountered higher oil prices, as geopolitical tensions and output cuts at Opec+ lifted crude markets, it said. That raised profits from drilling, although refining margins suffered, dropping 30 per cent on year.
Brent Crude has since fallen to around US$73 a barrel from over US$86 at the end of the first half. The company expects prices to range between US$70 and US$80 in the near term, chief executive officer Muhammad Taufik said at a briefing on Thursday.
The company has faced other headwinds this year, including an unceremonious exit from South Sudan, and an attempt by Malaysia’s biggest state of Sarawak to carve out the company’s gas trading rights in Borneo.
“Negotiations are difficult, but discussions are ongoing with Sarawak state government and federal government,” Taufik said. “We remain a strategic partner for Sarawak. We have invested heavily in Sarawak.”
Petronas is expected to pay a lower dividend of RM32 billion this year to the Malaysian government, which leans heavily on the company for revenue. BLOOMBERG
