Hibiscus Petroleum Bhd Targets Growth Despite UK Windfall Tax Challenges

Hibiscus Petroleum Bhd Navigates UK Windfall Tax Impact Amid Strong Growth Targets

Kuala Lumpur, May 23, 2025 — Hibiscus Petroleum Bhd, Malaysia’s sole pure-play upstream oil and gas producer listed on Bursa Malaysia, has maintained its ambitious full-year sales volume target despite facing headwinds from the UK’s Energy Profits Levy (EPL). The company aims to achieve a 17% year-on-year increase in sales volumes, reaching 9.1 million barrels of oil equivalent (mmboe) for the fiscal year 2025.

In the third quarter ended March 31, 2025, Hibiscus sold 2.1 mmboe, a slight decrease from 2.6 mmboe in the previous quarter. This performance has brought the total sales for the nine months to nearly 6.4 mmboe, leaving the company short of its full-year target by approximately 2.7 mmboe. Despite these challenges, Hibiscus remains optimistic about its growth trajectory.

The company’s financial results for the quarter were significantly impacted by a non-cash deferred tax liability of RM167.3 million due to the UK’s EPL, resulting in a net loss of RM115.97 million. This contrasts sharply with the net profit of RM101.81 million reported in the same period a year earlier. Excluding this one-off charge, Hibiscus would have reported a normalized net profit of RM51.3 million, nearly half of the previous year’s figure.

Revenue for the quarter declined to RM572.80 million from RM603.51 million in the prior year. For the first nine months of FY2025, net profit dropped to RM42.89 million from RM358.44 million, while revenue fell to RM1.70 billion from RM1.98 billion.

Despite these financial setbacks, Hibiscus Petroleum’s managing director, Dr. Kenneth Pereira, emphasized the company’s operational effectiveness and asset quality. “Despite fluctuating market conditions and the one-off, non-cash deferred tax charge related to the UK’s EPL and lower oil and gas prices, we delivered strong financial results — with EBITDA of RM308.2 million and PBT of RM128.3 million — and remain firmly on track to achieve our sales volume target,” Pereira stated.

Hibiscus’ operating cash flows for the nine months amounted to RM1.5 billion, marking a 144% year-on-year increase compared to the same period in FY24. The company achieved an average production of 26,956 barrels of oil equivalent per day in 3Q25 and declared a fourth interim single-tier dividend of 1 sen per ordinary share, resulting in total declared dividends of 8 sen for the year.

Looking ahead, Hibiscus Petroleum is well-positioned to navigate the challenges posed by the UK’s EPL and fluctuating market conditions. The company’s strategic focus on operational efficiency and asset quality, coupled with its strong cash flow generation, positions it well to achieve its growth targets and deliver value to shareholders.

As the global oil demand outlook remains uncertain, Hibiscus Petroleum’s ability to maintain its growth trajectory amidst these challenges will be closely watched by market observers and investors alike.