Quarterly Report For The Financial Period Ended 30 June 2017
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Condensed Consolidated Statement Of Profit Or Loss And Other Comprehensive Income For The Second Quarter Ended 30 June 2017
Condensed Consolidated Statement Of Financial Position As At 30 June 2017
Review of Performance – YTD Q1 2017 vs. YTD Q1 2016
Revenue for the second quarter ended 30 June 2017 was 30% higher against the same period last year, attributable to 15% higher prices for market traded refined product and additional sales of 0.33 million barrels in the current quarter, when compared to Q2 2016. These were complemented by lower plant unplanned downtime whilst the plant underwent a minor turnaround for its smaller crude distiller and a relatively stronger US Dollar against Ringgit Malaysia during the period in review (Q2 2017: USD1.00 = RM4.33; Q2 2016: USD1.00 = RM4.01).
Similarly, revenue for the 6-months period ended 30 June 2017 was 43% higher than revenue for the corresponding period last year, due to higher average product market prices at $63.40 per barrel, compared to $47.50 per barrel for the first half of last year. A stronger US Dollar against the local currency during the first 6 months of the current year further widened the variance in revenue recognised between both periods.
Gross profit for the quarter ended 30 June 2017 was supported by improved market average product cracks, offset by a stockholding loss of $1.71 per barrel, as global crude prices experienced a decline between April 2017 and June 2017. Gross profit recorded in the corresponding quarter last year included stockholding gains of $3.50 per barrel, as the average crude and product prices recovered amidst a rebalanced global crude inventory.
Stronger market average product cracks in the first quarter of 2017 contributed to a higher gross profit for the 6 months ended June 2017 in comparison to the first half of 2016, although margins remained comparable as a percentage of average product prices for both periods.
Profit after taxation for the current quarter was comparatively lower against the same period last year, due to the minor turnaround maintenance expenses and additional amortisation charges arising from new software/intellectual property assets that were capitalised towards the end of FY2016. Foreign currency loss due to the effects of a stronger RM against USD; and higher financing costs contributed further to the variance between the quarters under review.
The Company’s net profit for the 6 months ended 30 June 2017 is mainly due to higher gross profit and lower administrative costs, offset by the minor turnaround maintenance costs, software subscription charges, higher finance costs and additional amortisation of intangible assets and foreign currency loss on RM denominated expenses arising from a stronger RM against USD.
Current Year Prospects
Crude oil prices and refining margins are expected to remain volatile. Operational efficiency, product quality, hydrocarbon and financial risk management continue to remain key areas of focus in optimising the Company’s performance for FY2017.