KUALA LUMPUR (REUTERS) - Malaysia's Petroliam Nasional Bhd said on Tuesday it swung to a fourth-quarter profit from a loss in the year-ago period, helped by cost-cutting efforts, but the state oil company maintained a cautious outlook for 2017.
Petronas, as the company is known, maintained what it called a "conservative" outlook for this year, saying it expects oil prices to remain uncertain as it continues to pursue lower costs amid a drop in global oil prices. "I don't know whether the worst is over or not. We are preparing ourselves for a very uncertain second half of this year," Petronas group CEO Wan Zulkiflee Wan Ariffin told reporters.
He said Petronas was budgeting for an oil price of US$45 (S$63.5) a barrel for 2017. Benchmark Brent crude was trading around US$51.50 a barrel on Tuesday, close to a three-month low.
Petronas posted a profit after tax of 11.3 billion ringgit (S$3.58 billion) for the October-December period, compared with a 2.96 billion ringgit net loss for the same quarter a year ago, primarily due to a drop in operating expenses and impairment costs.
Revenue for the quarter stood at 58.6 billion ringgit, down from 60.1 billion ringgit for the corresponding quarter a year ago, due to lower oil prices and sales volumes.
For the full year, the state oil company reported a net profit after tax of 23.5 billion ringgit, higher from 20.9 billion ringgit in 2015, also helped by the decline in costs.
The company said "controllable" costs fell by 8 per cent in 2016, while capital investments for the year tumbled 22 per cent due to project deferment and other cost-cutting steps.
Though global oil prices have recovered somewhat, they are still holding at less than half the levels of mid-2014, hitting profits and cash flows at global oil majors and forcing cuts on spending and project plans.
As oil prices traded near 12-year lows in early 2016, Petronas said it would slash spending by 50 billion ringgit over the next four years.
Malaysia relies on its only Fortune 500 company for nearly a third of its oil and gas-related revenue. Petronas is one of the country's largest employers with a workforce of over 50,000.
Petronas said it expected to pay a 13 billion ringgit dividend to the government this year, unchanged from a figure announced earlier by the government. That's lower than a 16 billion ringgit dividend Petronas has said it would pay for 2016 and the 26 billion ringgit it paid in the year before that.