Published on January 6th, 2023 | by Daniel Sherman Fernandez0
PETRONAS Very Possible RM100 Billion Profits For 2022
Already in Q3 PETRONAS had core earnings of RM72B.
National oil giant PETRONAS in its latest 9M 2022 results were expectedly strong said Maybank IB, with its core net profit of RM72b which is a 173 percent YoY which is on track to meet the research house’s RM100b target.
Interestingly, PETRONAS made RM55 billion profit in 2013 when oil prices hovered at the USD80-USD100 per barrel level.
Meanwhile, the capex for PETRONAS was also up 34 percent with domestic capex rising by MYR2b YoY, benefitting the local OGSE players.
As expected, PETRONAS replicated its QoQ performance, with core net profit of MYR25b (-3 percent QoQ) in 3Q22. This took 9M22 core earnings to MYR72b.
The YoY strength was driven by higher oil prices (dated Brent; +55 percent to USD103/bbl) and its production/ entitlement. Net cash was at MYR94b up 46 percent while its FCF improved by 63 percent x YoY to MYR56b.
Petronas spent a higher CAPEX to-date (62 percent upstream, 15 percent gas & new energy, 12 percent downstream, 10 percent corporates & others) while Domestic CAPEX was up MYR2b YoY.
Maybank IB believes the oil giant is on track to reach MYR100b core NP in FY22 and expects the fine financial performance momentum to extend into 4Q22, with an MYR100b core NP within reach in FY22. The banking research house expects the oil price to remain elevated, as the winter period approaches and geopolitical risk remains high.
Crude oil (avg) estimate for FY22 is unchanged, at USD100/bbl (Brent) and does do not rule out a higher oil price outlook in FY23 considering the continued tightness in the global supply market, due to the prolonged structural under-investment since 2015.
Meanwhile, PETRONAS announced its NZCE 2050 pathway on 1 November 2022, setting out the details of how the organisation will address emissions from its operations and growth targets for its cleaner energy solutions.
PETRONAS has set a near-term target to cap operational emissions to 49.5 million tonnes of carbon dioxide equivalent by 2024 in Malaysia and achieve 25 percent absolute emissions reduction Group wide by 2030 based on 2019 emissions data. PETRONAS is allocating 20 percent of its capital expenditure for de-carbonisation projects and expansion into cleaner energy solutions from 2023 to 2026.
Delivery of these targets is anchored on business context, national policies, international frameworks and scientific consensus on climate change that supports the ambitious goals outlined in the Paris Agreement.
Beyond business, PETRONAS is committed to giving back to society and creating a positive social impact for Malaysians and the countries where we operate.
As at 30 September 2022, PETRONAS contributed more than RM540 million towards the nation’s sustainability and community well-being and development efforts, benefitting over 900,000 beneficiaries worldwide.