PetDag earnings dip 13.7% to RM218m

KUALA LUMPUR: Petronas Dagangan Bhd expects the retail market to remain competitive on declining car sales even as consumers turn to energy-efficient vehicles, public transport and e-hailing services.

It said this as it announced its net profit for the first quarter ended March 31, 2018, dipped 13.7% from the year-ago quarter to RM218.48mil while overall revenue rose 4% to RM7.07bil.

This was mainly owing to a 15% slide in operating profit for its retail segment to RM165.8mil from the year-ago quarter, on the back of lower revenue of RM3.67bil.

"Retail Segment revenue decreased by RM38.6 million attributable to lower volume by 2% from Mogas and Diesel arising from higher average pump prices and challenging market conditions. This was partially offset by increase in LPG revenue following effective sales strategies and competitive pricing," the group said in a stock exchange filing.

Operating profit for the segment was impacted by higher product cost and production of cylinders, which led to a lower margin at Retail LPG, as well as rising salaries, wages and benefit expenses. It said this was partially offset by higher margin for Mogas following lower product cost. 

For the commercial segment, operating profit slipped 2% to RM119.1mil due to higher operating expenses. This comes despite revenue rising 11% to RM3.4bil on volume growth and a higher average selling price.

On its outlook on oil prices, the group expects the price of Brent crude to be volatile despite the uptrend that saw it average US$66.42 per barrel in the first quarter of this year.

This was an improvement over the full-year average price of Brent crude of US$54.27 a barrel in 2017.

"The volatility of oil price, economic growth and consumers' sentiment will have impact on the group's profitability," it said.

Petronas Dagangan declared an interim dividend of 13 sen per share with entitlement and payment dates on June 5 and 14 respectively.