Malaysia's Petronas posts US$704m Q4 net loss, confirms spending cuts

[KUALA LUMPUR] Malaysia's Petroliam Nasional Bhd, or Petronas, reported a fourth-quarter net loss on Monday and announced spending cuts for the next few years, as the state oil company braces for a prolonged period of low oil prices.

Petronas reported a net loss of RM2.96 billion (US$704.3 million) for the October-December period, compared with a loss of RM7.3 billion a year ago. The company attributed the net loss to impairment of assets caused by low oil prices.

Revenue for the quarter was RM60.1 billion, down nearly a quarter from RM79.4 billion for the corresponding period a year ago.

The 70 per cent slump in crude oil prices since mid-2014 has been squeezing the finances of unlisted Petronas, which accounts for about a third of the Malaysian government's oil and gas revenue.

"2016 and 2017 will continue to be challenging for Petronas," Petronas President and Group CEO Wan Zulkiflee Wan Ariffin said at a press conference to announce the results.

"We are planning our projections based on Brent price at $30 for this year, and must brace ourselves for the corresponding impact to our financial performance." Petronas also confirmed plans to cut spending by RM50 billion over the next four years, as earlier announced in an internal memo to its staff.

It said the company would start with RM15-20 billion cuts in 2016. But it added that it would stick to its commitment of paying a dividend of RM16 billion to the government for 2016.

REUTERS