KUALA LUMPUR (AFP) –
Malaysia's biggest company, state energy firm Petronas, revealed Thursday a 23.2 percent plunge in net profit for the fiscal year ended March 31 due to weak demand and low oil and gas prices.
"The financial year ended 31 March 2010 was an unusual, difficult and challenging year for the Petronas Group as the first peace-time global recession since the Great Depression took its toll on the global oil and gas industry," it said in a statement.
"Amid a collapse in global consumer spending and falling industrial output, world primary energy demand suffered its first contraction in nearly three decades, led by declines in the demand for oil and gas."
Petronas, Malaysia's biggest company in terms of profit, assets and revenue, said its net profit was 40.3 billion ringgit (13 billion dollars) compared with 52.5 billion ringgit a year earlier.
Revenue fell 18 percent to 216.4 billion ringgit due to a contraction in product prices and lower sales volume.
Petronas is Malaysia's only Fortune 500 company and the country's most profitable firm. It is also among Malaysia's largest bond issuers.
It sold Malaysian crude oil at an average price of 72.69 dollars a barrel in the fiscal year 2010 compared with 88.07 dollars a year earlier.
Petronas' new boss, Shamsul Azhar Abbas, however, projected a better financial year for 2011 but added the "most challenging part is how to manage costs."
"We are very comfortable (with the first quarter numbers)," said the chief executive who was appointed in February.
Shamsul said the average Malaysian crude oil price was expected to be in the 70 to 80 US dollars a barrel range for the current fiscal year ending March 31, 2011.
"It should move between 70 to 80 US dollars for the rest of the year. We should be comfortable," he said.
Shamsul said Petronas had budgeted 40 billion ringgit for capital expenditure in 2011, up from 37 billion a year earlier, adding the company would "ramp up domestic production".
In the 2010 financial year, production fell marginally to 1.75 million barrels of oil per day from 1.8 million barrels a year ago.
TOKYO – Toyota Motor Corp. said Thursday about 270,000 cars sold worldwide — including luxury Lexus sedans — have faulty engines, the latest quality lapse to hit the automaker following massive global recalls.
Japan's public broadcaster NHK and Kyodo News agency said Toyota, the world's No. 1 automaker, was considering recalling the vehicles but didn't name sources.
Toyota spokesman Hideaki Homma said the company was considering measures to deal with the problem of defective engines that can stall while the vehicle is moving. He would not confirm a recall was being considered.
The automaker has been working to patch up its reputation after recalling more than 8 million vehicles worldwide because of unintended acceleration and other defects.
Of the 270,000 vehicles with engine problems, some 180,000 were sold overseas and the rest in Japan. They include the popular Crown and seven models of luxury Lexus sedans.
Toyota said there have been no reports of accidents linked to the faulty engines. It did not say how it learned about the engine troubles.
The automaker's shares fell 1.1 percent to 3,045 yen in Tokyo on Thursday.
U.S. authorities recently slapped Toyota with a record $16.4 million fine for acting too slowly to recall vehicles with defects. Toyota dealers have repaired millions of vehicles, but the automaker still faces more than 200 lawsuits tied to accidents, the lower resale value of Toyota vehicles and the drop in the company's stock.
In the aftermath of the recalls, Congress is considering an upgrade to auto safety laws to toughen potential penalties against automakers, give the U.S. government more powers to demand a recall and push car companies to meet new safety standards.
Toyota said last week it will recall 17,000 Lexus luxury hybrids after testing showed that fuel can spill during a rear-end crash.
WASHINGTON – Nearly two years after a Wall Street meltdown left the economy reeling, the House on Wednesday passed a massive overhaul of financial regulations that would extend the government's reach from storefront thrifts to the executive suites of Manhattan.
Senate support for the far-reaching bill remained in flux, however. The Senate was forced to delay its vote to mid-July, denying President Barack Obama a victory before Independence Day. Democrats struggled to secure the votes of a handful of Republican senators even after meeting their demands and backing down on a $19 billion tax on big banks and hedge funds.
The legislation, swelling to more than 2,000 pages, would rewrite the nation's regulatory books. Simple supermarket purchases and exotic derivatives trades would be subject to new laws. And the entire financial system would be placed on a risk watch in hopes of thwarting the next threat of a financial crisis.
Obama hailed the vote as "a victory for every American who has been affected by the recklessness and irresponsibility that led to the loss of millions of jobs and trillions in wealth."
The 237-192 House tally broke largely along party lines but attracted more support than in December when no Republicans voted for the House version of the bill. The new legislation combines the House bill with one passed by the Senate last month.
"Today, I rise with a clear message that the party is over," House Speaker Nancy Pelosi declared. "No longer again will recklessness on Wall Street cause joblessness on Main Street. No longer will the risky behavior of the few threaten the financial stability of our families, our businesses and our economy as a whole."
Republicans portrayed the bill as a vast overreach of government power that would do little to prevent future bailouts of failing financial institutions. They complained that it failed to place tighter restrictions on Fannie Mae and Freddie Mac, the mortgage giants forced into huge federal bailouts after their questionable lending helped trigger the housing and economic meltdowns.
"This legislation is a clear attack on capital formation in America," said Rep. Eric Cantor of Virginia, the second-ranking House Republican. "It purports to prevent the next financial crisis, but it does so by vastly expanding the power of the same regulators who failed to stop the last one."
Only three Republicans voted for the bill: Joseph Cao of Louisiana, Mike Castle of Delaware and Walter Jones of North Carolina. Nineteen Democrats voted against it, eight fewer than in December.
As predictable as the House vote may have been, the Senate was a study in unpredictability.
House and Senate negotiators were forced to reconvene Tuesday to remove a $19 billion tax on large banks and hedge funds, hoping to overcome objections from Sens. Scott Brown, Susan Collins and Olympia Snowe, all Republicans who voted for the Senate version last month.
Democrats inserted the tax late last week as they assembled a combined House-Senate bill, catching big banks by surprise. Brown was the first to complain and threatened to vote against the bill if the tax remained in the final measure.
Desperate to hold at least 60 votes to beat back procedural hurdles, House Financial Services Committee Chairman Barney Frank, Senate Banking Committee Chairman Chris Dodd and Obama administration officials scrambled to drop the tax and devise another means of financing the bill's cost.
In the end, House and Senate negotiators, voting along party lines, agreed to pay for the bill with $11 billion generated by ending the unpopular Troubled Asset Relief Program — the $700 billion bank bailout created in the fall of 2008 at the height of the financial scare.
They also agreed to increase premium rates paid by commercial banks to the Federal Deposit Insurance Corp. to insure bank deposits. The increase would not affect banks with assets under $10 billion.
On Wednesday, Collins issued a statement saying she was now inclined to vote for the bill.
But Brown remained uncommitted, saying he needed Congress' weeklong July 4 recess to examine the details of the bill. He did credit Dodd for "thinking outside the box" in finding an alternative.
Snowe late Wednesday said she, too, wanted to review the bill, but said that the last-minute change put the bill "in a much better position."
The American Bankers Association denounced the bill, and its president and CEO, Edward Yingling, vowed to continue to make the industry's case to the Senate.
"Many small banks are telling us they will simply have to sell out to larger institutions that have the staff to deal with the massive volume of new reports and rules," Yingling said in a statement.
The administration and House and Senate lawmakers have worked for more than a year to forge a bill. It has prompted a backlash from the financial industry and a populist cry from Congress to punish banks for the freewheeling practices that contributed to the 2008 meltdown.
The easy margin of victory in the House belied Frank's need to navigate the bill through the competing interests of New Yorkers, moderates and liberals. Frank, who will share the bill's official title with Dodd, credited Pelosi and the Democratic leadership for being "therapists, counselors, advisers — muscle when I needed it."
The legislation creates a new federal agency to police consumer lending, it sets up a warning system for financial risks, forces failing firms to liquidate and maps new rules for instruments that have been largely uncontrolled.
The legislation requires bank holding companies to spin off their derivatives business into self-funded subsidiaries. Banks would be allowed to keep less risky derivatives operations.
It sets new standards for what banks must keep in reserve to protect against losses, though lobbyists carved out a grandfather exception for banks with assets of less than $15 billion.
Commercial banks would not be permitted to trade in speculative investments, but they could invest no more than 3 percent of their capital in hedge funds and private equity funds.
At a consumer level, lenders would have to disclose more information and require proof that borrowers have the ability to pay off their mortgages. Even retail purchases would be affected — merchants could end up paying lower fees to banks for debit card purchases by their customers.