KUALA LUMPUR, March 12 (Bernama) — Moody’s Investors Service expects Petronas’ earnings to improve in 2016 in tandem with anticipated higher oil prices.
In a note, the credit rating agency said it expected oil prices to be higher at US$65 per barrel next year versus US$55 per barrel this year.
“Our earnings expectations are based on the assumption that Petronas will increase its production by a marginal amount over the next two years,” it said.
Moody’s said the national oil and gas company would remain well-positioned at its current rating level of “A1 Stable”, largely supported by its strong liquidity.
“Petronas has low leverage, a substantial cash balance and manageable debt maturities whereby as of Dec 31,2014, its cash and cash equivalents amounted to RM136.2 billion compared with a total balance sheet debt of RM36.8 billion.
“Petronas’ financial metrics are still stronger due to its higher profitability stemming from a lower cost of production and its conservative financial profile,” it said.
On the company’s capital expenditure, Moody’s expects it to remain high and at an average of about RM60 billion, annually, over the next five years.