[RAM] RAM Ratings affirms PETROS's rating at AAA/Stable

RAM Ratings has affirmed Petroleum Sarawak Berhad’s (PETROS or the Company) AAA/Stable/P1 corporate credit ratings, along with the AAA/Stable rating on its RM15 billion Islamic Medium-Term Notes issued by its subsidiary, Petroleum Sarawak Exploration & Production Sdn Bhd. 

The affirmation reflects Sarawak’s strong State Implicit Strength (SIS) under RAM’s SIS Framework and underscores PETROS’s strategic role in developing the state’s oil and gas sector. As petroleum-related income remains a significant source of income for the Sarawak government, ongoing state support for PETROS is anticipated as and when needed. 

PETROS’ financial performance were adversely impacted by weaker commodity prices, with FY Dec 2024 revenue declining 11.5% to RM3.5 bil and pre-tax profit falling 43.9% to RM868.8 mil. The downward trend persisted in 1H FY Dec 2025 as revenue dropped 23.5% y-o-y to RM1.5 bil and pre-tax profit 44.8% to RM398.2 mil. These declines were driven by continued softness in crude oil prices and a temporary shutdown at the Bintulu LNG complex which limited gas production. Operations have since normalised, with PETROS expecting full-year 2025 revenue of about RM3.1 bil. 

As at end-June 2025, PETROS maintained a strong liquidity position with RM2.8 bil in cash. Gearing improved slightly to 2.46 times (end-June 2024: 2.56 times) but is expected to rise to about 3.3 times by year-end after a recent RM2 bil sukuk issuance to part-fund the Miri Combined Cycle Gas Turbine project. Lower commodity prices have also pressured debt metrics, with the Company’s annualised debt-to-operating profit before depreciation, interest and tax ratio climbing to 3.70 times (end-June 2024: 2.61 times) and annualised funds from operations debt coverage easing to 0.23 times (FY Dec 2024: 0.25 times). Despite these pressures, PETROS’s financial profile remains solid, and gearing should ease gradually as earnings recover and borrowings are repaid.

The transfer of Sarawak’s sole gas aggregator role to PETROS following its appointment under the Distribution of Gas Ordinance in 2024 has been delayed due to a legal dispute and ongoing negotiations. Nevertheless, a federal-state joint declaration in May this year confirmed that PETROS’s interim management of domestic gas distribution until a new arrangement is finalised, potentially adding a new revenue stream. 


Analytical contacts
Darrel Tiang
(603) 2708 8219
darrel@ram.com.my

Thong Mun Wai
(603) 2708 8255
munwai@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my