PetDag credits economic recovery, lower crude prices for better earnings in 2Q22

As Malaysia continues its economic recovery phase, the company will also be focusing its growth in the non-fuel market by opening another 7 Mesra Café

by FAYYADH JAAFAR / pic TMR

PETRONAS Dagangan Bhd (PetDag), the retail arm of national oil company Petroliam Nasional Bhd, reported a net profit of RM236.3 million in the second quarter of this year (2Q22), up by RM155.54 million from RM82.14 million in 2Q21 as the company benefitted from the retail and non-fuel market recovery that saw demand growing for its products and services. 

In a filling to the local bourse yesterday, PetDag attributed the increase to a one-off gain from the disposal of its liquefied petroleum gas business in Sarawak. However, operating expenses were higher than expected due to the increase in fuel prices, which resulted in a decline in the company’s bottomline. 

Additionally, PetDag also noted that the overall sales volume registered an upward trend during the quarter following the loosening of travel restrictions, increased economic activities during the festive season and the resumption of international travel at the beginning of the quarter. 

The company’s quarterly revenue also increased sharply, from RM5.18 billion to RM9.5 billion, thanks to a 30% spike in average selling prices and a 28% increase in sales volume year-on-year. 

PetDag’s net profit for the period also increased to RM356.17 million from RM273.25 million a year earlier underpinned by higher revenues of RM17.12 billion.

A favourable Brent price of US$134.78 (RM605.16) per barrel, compared to US$68.78 per barrel the previous year, was also cited as a contributing factor in the company’s strong performance. 

With the economic recovery, PetDag said it continued to focus on growth in the non-fuel market with the opening of seven new Mesra Cafés, its food and beverage or convenience store chain, in 2Q22 that complement its retail and convenience segment.

 “The non-fuel market will strengthen further with the opening of more Mesra Café locations nationwide, as we aim to leverage our existing networks and infrastructure to widen our reach, improve our retail offering, and future-proof our business,” it added. 

“While the volume and oil price movement have further improved the overall performance of the retail segment, the commercial segment has recorded a loss before tax due to volatility and the steep increase in prices during the quarter that have impacted higher product costs and its margin,” the company said in a statement. 

The group’s total assets grew by RM7.65 billion (or 80%) as of June 30, 2022, mostly as a result of a delay in subsidy receivable and price hikes, while total liabilities climbed by RM7.6 billion (or 80%) for the same reasons.