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Better Q3 pre-tax profit for Petronas Dagangan

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KUALA LUMPUR — November 8, 2016: Petronas Dagangan’s pre-tax profit for the third quarter ended last September 30 rose to RM331.69 million from RM299.39 million a year ago.

Revenue, however, declined to RM5.53 billion from RM6.50 billion as a result of a decrease in the average selling price by 13 per cent, coupled with lower sales volume of two per cent.

The company informed Bursa Malaysia today that revenue from retail fell by RM508 million mainly due to a drop in the average selling price by 15 per cent impacting both petrol and diesel despite volume being higher by one per cent.

Operating profit for the segment registered an increase of RM24.6 million, mainly due to improved diesel margins and higher other income.

Revenue from the commercial segment declined by RM461.1 million due to a decrease in average selling price by 11 per cent and volume by five per cent, impacting both diesel and aviation fuel.

However, operating profit increased by RM14.6 million mainly due to higher margins from aviation and fuel oil, as well as higher other income.

For the nine-month period, Petronas Dagangan’s pre-tax profit declined to RM876.34 million while revenue fell to RM15.77 billion from RM19.04 billion as a result of a decrease in average selling price by 18 per cent despite higher sales volume of one per cent.

The retail segment’s revenue for the period fell by RM1.38 billion mainly due to a drop in average selling price by 14 per cent while operating profit declined by RM76 million due to impairment of subsidy receivables of RM89.9 million made in the second quarter.

Revenue from the commercial sector dropped by RM1.88 billion due to a decrease in average selling price by 21 per cent impacting revenue contribution from diesel and aviation fuel but operating profit increased by RM7.3 million mainly due to higher other income, partially negated by lower gross profit for diesel, in line with lower industry demand from exploration and production activities as well as the fishery sector.

On prospects, the company said the oversupply situation in the global market is expected to remain at least through the first half of 2017, resulting in continued price volatility.

“The economic and business environment outlook for financial year 2016 remains challenging,” it said.

The company will continue to focus on inventory management, supply and distribution efficiency as well as operating expenditure optimisation to ensure the company remains resilient amid a challenging environment.

The retail segment will push for higher sales of petroleum products, leveraging on its superior products. This segment will also focus on enhancing customer experience and services.

The commercial segment, on the other hand, will emphasise value by improving margins in targeted products and market segments, leveraging on the public and private sector investments in infrastructure and construction projects. — Bernama

 

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