Malaysia’s Petroliam Nasional Bhd warned that lower oil prices will continue to hurt its earnings on Wednesday after its first quarter profit fell by 60 percent.
The state-owned company has been hit hard by a tumble in oil prices that has forced it to slash costs and reduce dividends to the government. It detailed plans this year to cut spending by up to 50 billion ringgit ($12 billion) over the next four years.
“Concerns on moderate demand outlook and persistent oversupply will continue to pressure crude oil prices,” Petronas said. “Petronas expects performance to be affected by the volatility of oil prices and foreign exchange rate.”
It added that it will continue with its cost cutting.
In February, Petronas said it may have to borrow or tap into reserves to meet its dividend commitment to the government.
Crude oil prices have risen by about 30 percent this year and are near their 2016 highs, but prices are nevertheless down 60 percent since mid-2014, plagued by a global supply glut.
Petronas said lower prices across all products and higher net impairment on assets had also reduced profitability.
First-quarter net profit fell to 4.6 billion ringgit ($1.14 billion) from 11.4 billion ringgit in the year-ago quarter, while revenue slid 26 percent to 49.1 billion ringgit, it added.