Increase in fuel price jolts profit of Petronas Dagangan

The June quarter for Petronas Dagangan Bhd ended with earnings of RM273.21mil or a 47.2% from last year.

The jump is due to higher oil prices.

This was despite its revenue for the quarter falling 22.4% to RM6.49bil, which was mainly due to a 17% drop in average selling price coupled with a 6% decrease in sales volume.

The company, Petroliam Nasional Bhd’s 69.9% owned domestic marketing arm, said both its retail and commercial segments saw an improvement in operating profit in the quarter under review. The retail profit rose 45% to RM208.1mil while the commercial profit soared 64.4% to RM159.5mil.

In its quarterly unaudited report to Bursa Malaysia, PetDag said the RM123mil jump in second-quarter group operating profit to RM375.6mil was due to a RM46.3mil rise in gross profit (with higher margin contribution from both retail and commercial segments) and a RM42.2mil drop in operating expenditure.

There was also a RM34.5mil increase in “other income” mainly as a result of accounting reclassification arising from the implementation of the goods and services tax, which had no profit impact.

PetDag said the gross profit in the retail segment was boosted mainly by liquefied petroleum gas following a 10-sen-per-litre rise in RON95 and RON97 prices effective June 1, as well as the company’s cost-optimsation measures during the quarter.

On the commercial segment, it attributed the higher gross profit to efforts to improve margins. Improvement in margins was mainly contributed by bitumen and diesel.

On the current year’s prospects, PetDag said its board expected the economic and business environment to remain challenging in the second half.

“Uncertainty in the crude markets on the potential impact of the lifting of sanctions against Iran and increased production from Opec (Organisation of Petroleum Exporting Countries) is expected to put downward pressure on oil prices in a market where supply continues to exceed demand. The weakening global oil prices and recent global developments have also affected the ringgit exchange rate,” it noted.

PetDag’s board has declared an interim dividend of 14 sen per share for the second quarter, to be paid on Sept 22.

PetDag shares gained 8 sen to close at RM21.44 yesterday.

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