Petronas Dagangan’s profit boosted by higher selling prices

Petronas petrol station. Reporter Joseph Chin. .-Art Chen/ The Star.

KUALA LUMPUR: Petronas Dagangan Bhd (PetDag) posted a 14% jump in second-quarter (Q2) earnings to RM246.04mil despite selling lower volumes. bolstered by the higher average selling prices.

Releasing its unaudited Q2 results to Bursa Malaysia, it said revenue for the quarter ended June 30, 2017, improved by a whopping 22% year-on-years to RM6.51bil.

The main domestic arm of Petroliam Nasional Bhd said this stemmed from an increase in average selling prices by 28% following the increase in Mean of Platts, offset by 5% lower sales volume.

Group operating profit for the quarter under review was higher by RM66.9mil compared to that in the corresponding quarter last year mainly due to the retail and commercial segment.

The retail segment’s operating profit rose 29% to RM353.18mil while that of the commercial segment grew 8% to RM287.42mil.

The better profit of the retail segment was mainly contributed by impairment of subsidy receivables of RM89.9mil in the corresponding quarter last year, lower depreciation and amortisation and higher other income by RM10.5mil following gain from asset disposal.

Meanwhile, the commercial segment’s improvement was chiefly due to improved margins by RM15mil from the aviation sub-segment and RM4.6mil lower operating expenditure.

However, it suffered an 11% drop in gross profit from liquefied petroleum gas compared to the corresponding quarter due to aggressive competition within the industry.

For the first six months of the year, PetDag recorded a 15% increase in earnings to RM499.19mil on 29% higher revenue of RM13.19bil.

During the second quarter, Brent crude oil price ranged between US$44.2/bbl to US$55.0/bbl. 

PetDag said it expected the price would continue to be volatile during the year.

The company said its directors were of the view that the business environment outlook for FY17 remained challenging.

“The group will continue to focus on inventory management, supply and distribution efficiency as well as operating expenditure optimisation to ensure the company remains resilient,” it said.

The board has declared an interim dividend of 14 sen per share amounting to RM139.08mil for Q2 FY17, same as for the same period last year.