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Wednesday, August 24, 2016

Bloomberg : Petronas Profits Down 96% Last 3 Months, Serious Effect On Fake Economy

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Petronas Posts 96% Profit Drop on Lower Oil Price
to review Canada LNG project after Canadian govt decision
sticks to $30/bbl 2016 price assumption

Petronas said profit dropped 96% last quarter 
oil prices remained sharply lower than a year earlier
 
Net income fell to RM348m in three months through June
RM9.1b a year ago, company said Monday
Revenue slid 21% RM48.4b

first half of 2016 remained difficult for Petronas
continuous volatility of oil prices 

will result in loss of about 1,000 jobs
had 51,000 workers end 2014
focus on non-performers for further reductions
without aiming for a specific target

to lower capex and opex by RM20b in 2016
reduction of RM50b over four years
Petronas may raise debt to cover dividend to govt 
 
Brent averaged US$47 a barrel in second quarter
US$63 during the same period last year. 

will review LNG development in Canada 
after Canada govt finishes assessment Sept or Oct 
Petronas to revisit cost, schedule, market conditions 
delays in securing regulatory approvals

Canadian govt evaluating RM112b Pacific NorthWest LNG project 
Construction scheduled in 2015
concerns about fish, wildlife and First Nation tribes 

My comments : 

What about Petronas' reserves position? How much cash reserves does Petronas have? Some people say Petronas cash reserves will run out by end 2017.  Without reserves and with Malaysia's name stinking to high hell, can Petronas borrow money overseas?  Dont say I did not warn you.

The layoffs in the Oil and Gas industry exceeds way above the 1000 staff cut at Petronas. Plenty O&G companies have closed down or laid off staff.  The largest group that is affected are bumiputras.  I know O&G people who have quit and gone back to the kampong.   

The question is Petronas still has 50,000 staff. How efficient are they vis a vis the industry?

That LNG investment in Canada has been a disaster. I have been commenting about it for years now - even without any charts or analysts. But most 100% certainly some people have already become very rich, even from that fiasco. 

This is the scariest part :

 Net income fell to RM348m in three months through June
RM9.1b a year ago, company said Monday
Revenue slid 21% RM48.4b

These are very huge drops.  That revenue slide is just in three months. At this pace it could reach RM200 billion drop over 12 months.

The question is the Budget is due again soon. Where is the gomen going to get dividend money from Petronas to fund their corruption and wastage?  How are the GLCs (the fake economy) going to sustain their "money is not an objection" gomen handout dependent business models ?

I have some feedback about the GST which I am not going to share.  Lets see how much GST the gomen collects this year. 

I have said again, again and again the GST is killing the economy.  Economic growth has just been killed off by the GST. How long will it take for the morons to figure this out.

The largest consumer base in this country the Malays are mostly wage earners. Monthly salary earners. Why? Because the NEP has NOT created the BCIC (bumiputra commercial and industrial community). So Melayu semua masih hidup makan gaji dari majikan.

The GST has caused price rises of 15% - 20%  which has taken away the Malays' purchasing power by about the same amount.  Hence business has shrunk all over the country.  The Malays / bumiputras are the largest consumer base in the country. You have killed the goose that lays the golden egg.

Here is proof:

Now the gomen says the GDP growth this year is about 4% only ! !
Before they said 4.5% to 5 %. 
Now they say 4% to 4.5% !!

From 4.5% down to 4.0% is an 11% deceleration.  It is the speed at which the GDP growth is slowing down that is worrying.  It is slowing down at a faster pace.

in the case of Petronas their drop in profits has accelerated by 96% ! !
 
What shall we do? The solutions are easy. That is the best part. There are easy and painless solutions.

But it starts with getting rid of that monkey.  

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