Petronas FY2024 net profit: RM55.1 bil, down 31.7% yoy

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

America’s federal bureaucracy is under scrutiny, with diversity, equity, and inclusion (DEI) initiatives squarely in the crosshairs. Last year, the State Department allocated USD2.9 mil (RM12.83 mil) for diversity training and employed a 13-person “office of diversity and inclusion.” However, under Secretary of State Marco Rubio, staffers have reportedly been instructed to report diversity initiatives to a new email address, signalling a shift in priorities. Consulting firms are also feeling the impact: Deloitte, for example, secured over USD12 mil in DEI-related contracts from the Department of Health and Human Services since 2020, but such lucrative deals now appear to be drying up.

From 2014 to 2024, a total of RM42 mil was spent on maintaining the landscape in Putrajaya, covering 1,873 hectares of public parks, according to Minister in the Prime Minister’s Department (Federal Territories) Dr Zaliha Mustafa. Additionally, RM2.6 mil was allocated for upgrading and landscaping works in preparation for Malaysia’s ASEAN chairmanship this year.

There’s a concerning rise in school bullying cases, with 4,994 cases recorded as of Oct 2023, compared to 3,887 cases in 2022 and 326 cases in 2021, according to the Education Ministry. Basically, a staggering 15.3x rise in cases in a short span of 2 years but that could be explained by the resumption of school sessions post-Covid. In an adolescent health survey by the Health Ministry in 2022, it was reported that 1 in 5 teenagers in Malaysia has engaged in cyberbullying. The most prevalent forms of cyberbullying involved making rude comments online (11.3%), spreading rumours about others (6.9%) sharing or posting embarrassing photos (4.8%), soliciting discussions about sex online (1.8%) and urging others to engage in sexual activities online (1%).

3. IN MALAYSIA 🇲🇾

Petronas FY2024 net profit down 31.7% yoy
The national O&G giant saw its profit after tax plunge 31.7% to RM55.1 bil from RM80.7 bil a year earlier, due to lower average realised prices and favourable tax adjustments in 2023. Revenue fell 6.9% year-on-year (yoy) to RM320 bil from RM343.7 bil in FY2023, driven by softer energy prices despite higher sales volumes. The group’s revenue and profit peaked in FY2021 with revenue hitting RM372.3 bil and net profit of RM101.6 bil.
View chart: Petronas revenue and net profit FY2018-FY2024

What’s ahead? The group highlighted continuous investments in renewable energy, lower carbon projects and speciality chemical plants as part of its broader strategy to position itself for the global energy transition.

The elephant in the room: Petroleum Sarawak Bhd (Petros). The company said it’s still awaiting details that will be agreed upon by both the federal government and Sarawak on the state’s hydrocarbon resources. It’s unsure to what extent this will hit Petronas’ financials, but whether it is a related event or otherwise, Petronas will begin its phased rightsizing (corporate lingo for downsizing) initiative in the second half of the year that would affect 15k-16k of its 52k workforce.

View its press release here, and if you want more in-depth analysis, its presentation deck here.

Court: Of Guns and The 1975

• The gunman: Remember the man who attempted to murder his wife by shooting at KLIA in April last year? Hafizul Hawari, 38, has pleaded guilty to 7 charges and has been sentenced to a total of 14 years and 6 months in jail and 6 strokes of the cane, but he will be serving 6 years as the judge ordered for the jail sentences to be served concurrently. The charges: possession of a firearm, possession of bullets without a license and a plastic package containing ball-shaped firecrackers without a permit, and possession of 3 identification cards belonging to 3 other individuals.

• The 1975: A London court ruled that the British band The 1975 cannot be held personally liable for losses of the music festival Good Vibes that was shut down by authorities. The organiser, Future Sound Asia (FSA), of the music festival was seeking GBP1.9 mil (RM10.6 mil) in losses after one of its members Healy criticized the anti-homosexuality laws and then kissed bassist Ross MacDonald at the KL show in July 2023. The organiser sued the band members and their company over breach of contract and said its four members owed a duty of care, as the band promised to behave and follow guidelines and regulations (clearly they didn’t). It’s not over for FSA to claim damages as the judge allowed for the trial to proceed against the company. FSA, however, has to pay legal costs of GBP100,000. The band was supposed to be paid USD350,000 (RM1.55 mil) to perform a one-hour set.

Back in Malaysia — Minister in the PM’s Department Azalina Othman said a total of 18 cases involving high-profile individuals (VIPs/VVIPs) have been granted a discharge not amounting to acquittal (DNAA) over the past 8 years. How does one define VIPs/VVIPs? Based on a 2012 Chief Registrar’s circular, they are defined as royalty, politicians. judges and senior government officials. Former PM Najib Razak and former Treasury secretary-general Mohd Irwan Serigar Abdullah were two of the 18. Current DPM Ahmad Zahid Hamidi is another. Lucky them. We guess most of us more or less know who these folks are, but would be nice to see a complete list (compiled by others, not us).

Eco World x Google in data center deals
Eco World Development Group Bhd signed agreements, involving 2 transactions, to sell land for RM266.1 mil and build a data centre on another land to Pearl Computing Malaysia Sdn Bhd, an affiliate of Google.

Part 1: Paragon Pinnacle Sdn Bhd, a subsidiary of Eco World, agreed to sell 58.187 acres of industrial land in Eco Business Park V to Pearl Computing for RM266.1 mil (RM105 per sq feet).

Part 2: In a separate filing, Eco World’s other subsidiary Quantum Alpha Sdn Bhd signed an agreement with Pearl Computing to develop and lease data centres on 92.44 acres within the same park for an initial period of 20 years. The project is scheduled to be completed in 2027.

The latest land deal is the fourth sale of industrial land to data centre operators since 2024 for Eco World, bringing in total proceeds of RM1.586 bil.

Shorts

1. Some private hospitals at risk of being removed from insurance panels
   These hospitals may face removal from insurance panels as soon as they fail to meet requests by insurers for “exorbitant” discounts on patients’ bills, according to the Association of Private Hospitals Malaysia (APHM). Looking from the insurers’ perspective, if there were no “exorbitant” charges, would there be requests for exorbitant discounts? Anyhow, patients can still seek treatment from delisted APHM member hospitals, but payment will be made out-of-pocket first and claim later from their insurance provider, as delisted hospitals would not get guarantee letters from insurers.

2. Incoming by-election - Ayer Kuning

   UMNO president Ahmad Zahid Hamidi confirmed the notice on the vacancy of the state seat in Perak has been sent to the Election Commission following the passing of Ishsam Shahruddin, who died of a heart attack last Saturday evening while playing football at a stadium in Penang. A by-election date must be held within 60 days after a vacancy notice has been received by the EC. With this notice, Zahid Hamidi said Barisan Nasional will provide the EC with its views on a suitable date for the by-election as there would be several major events (i.e. Ramadhan) taking place within the next 2 months

4. AROUND THE WORLD 🌎

Israel escalates West Bank offensive and readies troops to prevent Palestinians from returning
While the ceasefire holds in Gaza, Israel continues to ravage the occupied West Bank, killing more than 800 Palestinians since Oct 7. Israel's Defense Minister said on Sunday that its army is now expanding its military offensive across the West Bank and preparing for their troops to remain in some refugee camps “for next year”. The purpose? To prevent the return of Palestinian residents to the northern West Bank, who have been evacuated from the refugee camps. Since the ceasefire came into effect in the Gaza Strip, Jenin and its adjoining refugee camp have been under Israeli siege, with Israel raiding Palestinian homes and bulldozing critical infrastructure. The Israeli army said that they have also deployed tanks in Jenin - the first time in the West Bank since the end of the second Intifada aka uprising, in 2005.

“Hands-on” leaders

• New Zealand minister resigns after putting hand on the arm of a staffer 
  New Zealand’s country's minister for commerce and consumer affairs, Andrew Bayly, has apparently resigned from his post, reportedly for putting his hand on a staff member’s upper arm during an “animated” discussion. He acknowledged that his behaviour was “overbearing”, and apologised for it officially. It was actually the second complaint lodged about his behaviour, the first was during a visit to a New Zealand business last October, where a worker complained that Bayly appeared to have been drinking, swore and called him a “loser” with his fingers forming the word “L” on his forehead. Nevertheless, Bayly said he would remain a member of parliament and looked forward to serving his electorate.

• UK’s MP Mike Amesbury jailed for punching constituent
  Suspended Labour MP Mike Amesbury who represented Runcorn and Helsby as an independent MP has been jailed for 10 weeks, after pleading guilty to assaulting a 45-year-old man named Paul Fellows. The magistrate in charge of the proceeding said a pre-sentence report showed Amesbury's actions were the result of "anger and loss of emotional control". Amesbury was taken to the cells immediately, and an application for bail pending an appeal was refused. He was also ordered to pay GBP200 (RM1,116.68) compensation to the victim, costs of GBP85 and a surcharge of GBP154. The Labour Party was quick to suspend him from the party, citing that local residents in the Runcorn and Helsby constituency deserved better representation in the future with a new Labour MP.

Shorts 

1. Four killed in South Korea highway bridge collapse 
   Five 50-metre steel structures supporting a highway bridge under construction collapsed in the city of Anseong, south of Seoul yesterday, killing four people and injuring six others. The victims were all workers of the construction site, and the cause of the collapse was not immediately known. Deadly accidents continue to regularly occur at industrial sites in South Korea, which introduced a law in 2022 to address safety lapses and punish company management if a worker is killed on the job. Watch the incident here caught on a dashcam.

2. Indonesia detains Pertamina officials in USD11.9 bil (RM52.37 bil) graft case 
   Seven suspects, including four Pertamina executives from state energy firm PT Pertamina were arrested yesterday for allegedly being involved in an IDR193.7 tril rupiah (USD11.9 bil or RM52.37 bil) corruption scandal involving the procurement of crude and oil products. Pertamina is legally required to seek crude from domestic contractors before turning to imports, but the scheme allegedly pushed refiners for marked-up imports between 2018 and 2023. Three other suspects from private companies are also accused of profiting illegally from the shipments.

3. Singapore DBS to cut 4,000 roles as AI replaces humans 
   Singapore’s largest bank, DBS, has announced that it expects to cut 4,000 roles over the next three years as it anticipates AI to take on more work currently done by humans. The bank employs a total of around 41,000 people and has between 8,000 and 9,000 temporary and contract workers. Permanent staff are not expected to be affected, but they did say that they expect the creation of 1,000 new AI-related jobs. DBS is one of the first major banks to offer details on how AI will affect its operations.

5. FOR YOUR EYES 📺

1. Mark Zuckerberg messages a Facebook engineer before acquiring Instagram for a billion bucks in 2012. This is obtained from court filing.

2. An interesting perspective on the difference between planning vs preparation

3. Once a hot game and popular franchise - what happened to Angry Birds?