Petroliam Nasional Bhd's (Petronas) pre-tax profit for the first quarter ended March 31, 2017, surged more than 100 percent to RM15.5 billion from RM6.8 billion in the same period last year.

The national oil company said higher earnings for the quarter was primarily driven by higher oil prices and improved margins from upstream and downstream businesses, in tandem with its ongoing transformation efforts that have resulted in heightened cost-optimisation and efficiency improvements across its value chain.

Stronger pre-tax profit for the quarter was also mainly contributed by higher revenue, which benefitted from higher average realised prices and lower net impairment on assets, partially offset by higher taxation, amortisation of oil and gas properties and product costs, it said in a statement today.

Revenue for the quarter grew by 25 percent to RM61.6 billion from RM49.1 billion in the same quarter of 2016, boosted by higher average realised prices recorded across all products, exchange rate impact and higher processed gas sales volume.

Petronas president and group chief executive officer Wan Zulkiflee Wan Ariffin (photo) said the group's strong performance in the first quarter of this year was driven largely by Petronas' transformation initiatives, which continued to gain traction.

"This has strengthened internal collaborations across our upstream and downstream businesses, resulting in improved plant utilisation rates, production and the overall creation of substantial value.

"We will continue to focus on driving our upstream and downstream businesses to maximise returns in unlocking value as a fully integrated oil and gas company," Wan Zulkiflee added.

Petronas said its earnings before interest, tax, depreciation and amortisation increased by RM9 billion or 58 percent to RM24.6 billion from RM15.6 billion in the corresponding quarter last year.

The group's cash flows from operations also grew 86 percent to RM18 billion, compared with the corresponding quarter last year, as a result of higher average realised prices.

Meanwhile, internal efforts to reduce cost and improve efficiency continued to allow Petronas to reduce controllable operating expenditure to RM11.1 billion from RM11.4 billion.

Total assets decreased to RM602.1 billion as at March 31, 2017, from RM603.3 billion as at Dec 31, 2016, as a result of a stronger ringgit against the US dollar.

Shareholders' equity increased to RM386.9 billion as at March 31, 2017, from RM380.3 billion as at Dec 31, 2016, contributed by profit generated during the period.

Gearing ratio decreased to 17.1 percent as at March 31, 2017, compared with 17.4 percent as at Dec 31, 2016, primarily impacted by higher equity following profit generated during the period.

Return on Average Capital Employed (ROACE) increased to 6.6 percent compared with 5.3 percent as at Dec 31, 2016, in line with the group's higher profits.

Moving forward, Petronas maintained a conservative outlook for the remainder of 2017, despite the positive results as supply and demand balances are still slow to return to a sustained equilibrium.

The group will focus on its group-wide efforts to optimise costs, further improve efficiency and operational excellence through strategic collaborations within the industry, it added.

- Bernama