Malaysian state oil firm Petronas posted a 68% slump in first-quarter profit on Friday and said it would cut capital expenditure and operating expenses as it braces for a big hit to its full-year performance due to the coronavirus pandemic.
Petronas pointed to "unprecedented" market conditions resulting from a combination of severe demand destruction from the pandemic and a global oil market glut.
"The Board expects the overall financial year performance will be significantly affected by these factors," it said in a statement.
The firm said although it continued to invest domestically, it anticipates supply chain constraints as a result of the pandemic.
"Against this challenging backdrop, our focus is to preserve cash and maintain our liquidity, continue our cost compression efforts and respond to changing market conditions with pace," Wan Zulkiflee Wan Ariffin, president, and group chief executive officer said.
In a video message, Wan Zulkiflie added that the group is planning to reduce its budget for capital expenditure by 21% this year and operating expenses by 12%.
"In doing so, we will strive as far as practically possible to minimize the impact of our domestic capital expenditure program."
Petronas' profit after tax for the January-March period fell to 4.5 billion ringgit ($1.03 billion) from 14.2 billion ringgit in the same period last year, due to lower prices of LNG, petroleum products and crude oil and condensates.
Excluding impairment charges, profit totaled 9.2 billion ringgit.
Revenue at the firm, formally known as Petroliam Nasional Berhad, fell 4% to 59.6 billion ringgit.
($1 = 4.3610 ringgit)
(Reporting by Mei Mei Chu Editing by David Goodman, Kirsten Donovan)