KUALA LUMPUR, June 5 (Xinhua) -- Analysts on Thursday projected decade-low financial performance for Malaysia's oil and gas sector amid rising global uncertainties.
CIMB Securities said in a note that Malaysia's oil and gas sector is being impacted by weaker crude oil prices, U.S. tariff risks, and potential cuts to Malaysia's state-owned oil and gas firm Petroliam Nasional Berhad's capital expenditure.
The research house has revised down the sector core net profit growth forecast for this year to -7.8 percent year-on-year (from +0.9 percent year-on-year).
This turn into negative territory indicates a probable reset to a new, lower earnings base, effectively reaching a fresh low within the last 10 years, with the decline ongoing since 2021.
"We anticipate earnings recovery to be gradual, constrained by structural challenges and company-specific headwinds," it said.
CIMB also anticipated further downside risks for petrochemical players, as earnings continue to face pressure from subdued demand for petrochemical products, which is weighing on average selling prices.
Additionally, it opined that the renewed U.S. tariff threats are likely to further dampen petrochemical demand.
Maybank Investment Bank also noted that lower oil majors' capital expenditure and the Organization of the Petroleum Exporting Countries (OPEC)'s policies in 2025 possibly impact Malaysia's oil and gas services and equipment (OGSE) players.
The research house added that local OGSE players could see lower offshore activities and jobs for the respective segmental service providers. ■
