Petronas posts record net profit

Petronas posts record net profit

Agence France-Presse Kuala Lumpur

Malaysian oil firm Petronas said on Wednesday net profit in the year to March 2004 rose 56.6 percent on year to a record 23.66 billion ringgit (US$6.2 billion) due to higher crude oil prices and operational improvements.

President and chief executive officer Mohamad Hassan Marican said revenue was also at a record level, up 20 percent at 97.51 billion ringgit from 81.43 billion a year ago.

Of the revenue, Mohamad Hassan said 65 percent was from Petronas' domestic operations while Africa and the rest of the world contributed 17.2 percent and 17.8 percent respectively.

He said group pretax profit grew 40 percent to 37.44 billion, resulting in a 38.4 percent annual return on revenue compared with an average of below 15 percent among major oil firms.

The group's return on capital employed for the year stood at 29.6 percent, he said.

Mohamad Hassan also said the group's balance sheet continued to strengthen with total assets growing to 203.21 billion ringgit from 178.01 billion, an increase of 14 percent, while shareholders' funds rose 25 percent to 97.06 billion from 78.36 billion.

But its cash and fund investment balance fell to 53.79 billion ringgit from 55.38 billion primarily due to the utilization of funds for asset acquisitions particularly the West Delta Deep Marine asset and Egyptian LNG (liquefied natural gas) project in Egypt, he said.

Borrowings fell to 57.73 billion from 58.09 billion mainly due to the repayment of $500 million in notes.

Mohamad Hassan said the group's total debt over assets ratio improved to 28.4 percent, which is within the group policy of keeping debt levels below 30 percent of total assets.

As for the outlook, Petronas Chairman Azizan Zainul Abidin said: "We are optimistic and bullish as we have created new sources of income that will come onstream this year".

Mohamad Hassan added that Petronas, being an integrated company, was partly cushioned from the volatility of oil prices.

Asked if Petronas had plans to raise its production capacity to cash in the prevailing oil prices, Mohamad Hassan said "we will be maintaining our production capacity".

Petronas has operations in 34 countries. As at January, Petronas had total oil and gas reserves of 24.14 billion barrels of oil equivalent, of which 80 percent were domestic and the balance international.