PetDag’s earnings soar on higher sales volume, disposal gain – Business News

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KUALA LUMPUR: Petronas Dagangan Bhd (PetDag) more than tripled its earnings for the third quarter (Q3) ended Sept 30, 2017, compared to a year earlier due mainly to a RM424.6mil gain on disposal of its liquefied petroleum gas-related operations in the Philippines.

The domestic marketing arm of Petroliam Nasional Bhd said higher sales volume and improved margins also contributed to its earnings soaring to RM761.73mil – its best quarterly earnings in more than a decade – from RM248.76mil previously.

Revenue jumped 22.1% to RM6.69bil, thanks to 3% higher sales volume and an 18% jump in average selling price following the increase in Mean of Platts Singapore prices, it told Bursa Malaysia.

Even without the extraordinary gain, PetDag showed a commendable group operating profit for the quarter under review grew 35.7% to RM439mil.

Group earnings per share, excluding gain on disposal of subsidiary, for the quarter rose to 33.6 sen from 24.4 sen recorded in the corresponding quarter last year.

(In July, PetDag disposed of its 100% equity interest in Petronas Philippines Energy Inc, or PEPI, and 40% equity interest in Duta Inc. Duta leases properties to PePI, which in turn distributes and markets LPG and other petroleum products.)

The latest results lifted its nine-month earnings to RM1.26bil, up 84.6% from the corresponding period in 2016. Revenue grew 26.6% to RM19.74bil.

PetDag managing director and chief executive officer Datuk Mohd Ibrahimnuddin Mohd Yunus said in a media statement: “We are pleased to record a stronger performance this quarter, amidst the challenging market environment and stiff competition.

“We intensified our sales and marketing campaigns and expanded into digital marketing and these efforts have proven to yield positive results for us in terms of gross profit and sales volume.”

The board has declared an interim dividend of 20 sen for the quarter (Q3 FY16: 14 sen). This raised the total dividend so far this year to 48 sen (FY16: 40 sen).

On the group’s prospects for the year, PetDag said its results were primarily influenced by petroleum product prices which have a high correlation to crude oil prices and the country’s economic outlook.

“In Q3 2017, Brent crude oil price ranged between US$46.5 and US$59.3 per barrel. The company expects the price will continue to be volatile,” it said.

On the gross domestic product (GDP), it noted that the full-year GDP was forecast to be lower at 5.2% compared with 5.8% in Q2 and 5.6% in Q1. In addition, inflation rate was higher at 4.3% in Q3 2017 against 3.6% in the preceding quarter, reflecting high cost of living which has eroded purchasing power.

PetDag said its directors felt the business environment outlook for the upcoming months of 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.

* See also Petronas Gas’ earnings dip in Q3



Read more : thestar

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