Petronas Cautious over Dividend to Gov't as Energy Prices Tank

Krishna N. Das
Friday, April 3, 2020

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

The government has said it would tap state enterprises to help out with a $58 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 24 billion ringgit ($5.5 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 141.62 billion ringgit at the end of last year, with total liabilities of 183.51 billion ringgit.

It did not comment on whether the recent slump in energy prices - oil benchmarks plunged more than 65% 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 1,150-1,250 ringgit per tonne, sharply down from last year's 1,594 ringgit.

Petronas, whose main listed units include petrochemicals maker Petronas Chemicals Group and retail arm Petronas Dagangan, paid 54 billion ringgit 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. 

(Reporting by Krishna N. Das; Editing by Kim Coghill)

Categories: Energy Activity Production Asia South-East Asia Malaysia

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