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Petronas cautious over dividend to government as energy prices tank

Reuters

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Malaysia's state energy giant Petronas, struggling with weak prices and falling demand, said today its own funding needs and debt obligations would dictate any special dividend to the government amid the Covid-19 crisis.

The government has said it would tap state enterprises to help out with a RM250 billion stimulus package announced last month to counter the impact of the pandemic on Southeast Asia's third-largest economy. The enterprises have not been identified.

Petronas, one of the world's largest exporters of liquefied natural gas (LNG), said in February that this year it would pay a regular dividend of RM24 billion to the government.

"Any additional dividends will need to take into account our ability to fund our on-going operations, service debts and other obligations as well as invest in future growth," Petronas told Reuters in an email.

The company had cash and cash-equivalent of RM141.62 billion at the end of last year, with total liabilities of RM183.51 billion.

It did not comment on whether the recent slump in energy prices - oil benchmarks plunged more than 65 percent in the first quarter - would make any extra payout difficult.

Malaysia's central bank said on Friday its economic forecast for this year assumed an LNG price range of RM1,150 to RM1,250 per tonne, sharply down from last year's RM1,594.

Petronas, whose main listed units include petrochemicals maker Petronas Chemicals Group and retail arm Petronas Dagangan, paid RM54 billion to the government last year as the treasury faced a funding crunch.

Malaysia has the highest number of reported coronavirus infections in Southeast Asia with more than 3,100 cases and 50 deaths.

- Reuters

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