PETRONAS, a key contributor to government coffers, will disburse a RM30 billion special dividend in several tranches over the course of the year.

The national oil company, which recorded a cash balance of RM181 billion as of December 31, 2018, had committed the one-off special dividend of RM30 billion last year.

“As you can see, we have sizeable cash reserves which (are) a result of our prudent management over the years.

“This has allowed Petronas to declare the RM30 billion to our shareholders (the government) last year,” said president and group CEO Wan Zulkiflee Wan Ariffin during the group’s full year financial performance announcement today.

Wan Zulkiflee said Petronas started distributing the payout from January.

The RM30 billion special dividend brings its total dividend commitment to the government to RM54 billion after the company said in August that it would raise its dividend payment by 50% to RM24 billion for 2018, from RM16 billion in 2017.

Petronas saw a 22% jump in net profit for the financial year-ended December 31 to RM55.3billion from RM45.5 billion in 2017, on the back of higher revenue and 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.

Revenue increased by 12% to RM251 billion in the financial year under review, compared with RM223.6 billion in 2017.

This was 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 the US dollar coupled with the impact of lower sales volume, mainly from LNG.

Meanwhile, for the fourth quarter ended December 31, 2018, Petronas recorded a 21% decline in net profit to RM14.3 billion from the RM18.2 billion in the corresponding quarter the previous year, mainly due to higher product costs, depreciation and amortisation, as well as petroleum proceeds.

However, revenue for the quarter under review was up 13% to RM69.9 billion from RM61.8 billion in the same quarter the previous year, mainly due to the impact of higher average realised prices for all key products.

For 2019, Wan Zulkiflee said the group will continue to focus on its operational excellence and growth strategies as the oil and gas industry continues to operate in a challenging environment arising from market uncertainties and geopolitical risks.

“Oil prices are expected to remain volatile in 2019, and uncertainty on various fronts will have a significant impact on prices.

“For the year ahead, we will remain focused on driving our stakeholders and ensuring 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.”

Petronas expects to spend slightly more than RM50 billion this year, compared with the RM46.8 billion for capital expenditure (capex) last year.

The Pengerang Integrated Complex (PIC) took up the bulk of last year’s capex spending, said Wan Zulkiflee, adding that the upstream segment will receive its fair share from this year’s allocation, along with the new energy segment into which Petronas is venturing.

The group will plan its expenses based on the oil price of US$66 per barrel.

As at end-January, PIC had reached 98% completion, and is set to begin commercial operations in the fourth quarter of the year. – March 8, 2019.