What drove Petronas to swing from RM21b loss to RM9.6b profit?

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Petronas Swings to Profit Driven by Increased Revenue and Improved Earnings

Petronas experienced a significant turnaround, moving from a net loss of RM21 billion in the second quarter of 2020 to a net profit of RM9.6 billion in the corresponding quarter of 2021. This substantial improvement was primarily fueled by a robust increase in earnings before interest, taxes, depreciation, and amortisation (EBITDA) and a reduction in impairment losses. The company's revenue also saw a marked rise, driven by favourable pricing and higher sales volumes across key products.
Surge in EBITDA and Revenue

In the second quarter of 2021, Petronas' EBITDA reached RM23.2 billion, a considerable increase from RM9.1 billion in Q2 2020. This surge in EBITDA was accompanied by a 68 per cent rise in revenue, which climbed to RM57.1 billion from RM34 billion in the same period last year. The growth in revenue was largely attributed to the positive impact of higher prices for major products and increased sales volumes, particularly for liquefied natural gas (LNG) and petroleum products.
Positive First-Half Financial Performance

The positive momentum extended into the first half of 2021, with Petronas reporting a net profit of RM18.9 billion, a stark contrast to the net loss of RM16.5 billion recorded in the first half of 2020. This turnaround was consistent with the trend observed in the second quarter, with higher EBITDA and lower impairment losses reflecting an upward trend in market prices. EBITDA for the first six months of the year stood at RM46.1 billion, a 57 per cent increase from RM29.4 billion in the prior-year period.
Contributing Factors to Revenue Growth

The overall revenue for the first half of 2021 expanded by 17 per cent to RM109.6 billion, up from RM93.6 billion in the first half of 2020. This expansion was predominantly driven by favourable average realised prices for key products and a higher sales volume, with significant contributions from liquefied natural gas (LNG) and gas sales. These factors collectively underpinned the company's improved financial performance.

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What drove Petronas to swing from RM21b loss to RM9.6b profit?

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