KUALA LUMPUR, Feb 26 – Petronas’ net profit fell 27 per cent to RM40.5 billion for the financial year ended Dec 31, 2019 from RM55.3 billion in the 2018 financial year, on the back of four per cent lower revenue of RM240.3 billion for the year under review from RM251 billion previously.

President and group chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin said the lower net profit was due to lower revenue and net impairment on assets amounting to RM7.3 billion while the weaker revenue was attributed to lower average realised prices for major products.

"Excluding the impact of impairment, our net profit for 2019 stands at RM47.8 billion, which is a six per cent reduction from 2018,” he told a media briefing on the oil and gas (O&G) company’s 2019 financial performance here today.

For the fourth quarter, the company’s net profit stood at RM4.1 billion, down 71 per cent from RM14.3 billion during the same quarter of 2018, on the back of eight per cent lower revenue of RM64 billion from RM69.9 billion.

He said 2019 was a difficult year as the industry continued to be marred by consistent and prolonged volatility with geopolitical instability as well as rising populism and protectionism dominating headlines throughout the year, which ended with a ‘black swan event’, the COVID-19 outbreak.

He said energy and commodity prices continued to show volatility amid these major events, with average crude price at US$64 per barrel recorded in 2019, lower than the average price of US$71 per barrel in 2018.

Wan Zulkiflee said the whole industry was not prepared for the impact of the COVID-19 outbreak and it has caused demand from China to soften, especially for liquefied natural gas (LNG).

However, he said, Chinese customers made up only six per cent of the group’s total revenue.

On dividend, he said Petronas paid out RM54 billion to the government during the course of last year, consisting of RM24 billion normal dividend and RM30 billion special dividend

"For this year, we have not held our annual general meeting yet, but we are planning for a RM24 billion dividend for this year,” he said.

He said the outlook for the O&G industry remains bearish given the ongoing geopolitical uncertainties, prolonged trade tensions and near-term demand disruptions due to the COVlD-19 outbreak.

Notwithstanding these challenges, he said, Petronas would remain steadfast in executing its strategies and sustaining operational efficiencies while maintaining fiscal discipline.

"We will remain committed to expanding our growth in Malaysia. In fact, our capital expenditure for Malaysia is expected to increase by more than 10 per cent within a range of RM26 to 28 billion in 2020, and we also target an increase of more than five per cent in our domestic O&G production.

"We will also capitalise on Pengerang Integrated Complex’s position as a petrochemical hub that is primed to cater to and fulfil the regional market demands,” he added. — Bernama