PetDag’s profit jumps 33% in 1Q19

by S BIRRUNTHA / pic by MUHD AMIN NAHARUL

PETRONAS Dagangan Bhd’s (PetDag) net profit rose 33% year-on-year (YoY) to RM291.1 million in the first quarter ended March 31, 2019 (1Q19), on better margins on products and sales volume.

The company also noted that the increase in profit was helped by gain on a fixed-asset disposal of RM11.1 million, but was offset by higher operating expenses of RM40.2 million due to advertising and promotion expenses.

In a filing to Bursa Malaysia yesterday, PetDag saw a 3% YoY increase in revenue to RM7.09 billion for the period driven by an increase in sales volume.

Earnings per share amounted to 29.3 sen. The company declared a dividend of 15 sen a share, payable on June 27, 2019. In its retail segment, revenue was reduced by RM32.4 million to RM3.63 billion due to decrease in average selling prices (ASPs) by 7%.

The fall in revenue was off set by higher sales volume of 6% following an improved station productivity, higher number of stations in operation, and introduction of the new Petronas Primax 95 during the period.

Its commercial business recorded a RM46.6 million rise in revenue to RM3.45 billion, contributed by a 1% increase in both ASPs and sales volume, the company’s exchange filing revealed yesterday.

The increase in volume was mainly attributable to higher Jet A1 sales on higher demand from existing customers and new contracts secured, followed by an effective sales strategy.

The group noted it will continue to focus on inventory management, supply and distribution efficiency, and operating expenditure optimisation to remain resilient.

Its retail segment will continue to leverage on product brand name and focus on strengthening dealership and network management, as well as enhance customer experience through digital initiatives such as Setel, an e-payment solution.

The retail business will also continue to pursue strategic partnerships to provide added convenience to customers.

Liquefied petroleum gas and lubricant businesses will focus on strengthening distribution channels to grow their market share, PetDag stated.

The group expects growth in manufacturing activities to lead stronger demand for its petroleum products in its commercial segment.