KUALA LUMPUR (May 18): Petronas Dagangan Bhd (PetDag)’s net profit in the first quarter ended March 31, 2018 (1QFY18) fell 13.7% to RM218.48 million, from RM253.15 million in the same period a year ago, dragged by lower performance of its retail and commercial segments.

Quarterly revenue, however, climbed 4.33% to RM7.07 billion in 1QFY18, from RM6.78 billion a year ago, thanks to stronger performance at its commercial segments, where the products saw an 8% growth in sales volume, as well as a 2% increase in the average selling price.

PetDag declared an interim dividend of 13 sen per share for the quarter ended March 31, 2018 (1QFY18), to be paid on June 14. 

However, PetDag said the higher revenue was offset by slower performance of its retail products, which saw a 2% decline in volumes from motor gas (mogas) and diesel, as a result of higher average pump prices and challenging market conditions. 

On a segmental basis, PetDag said the retail division saw operating profit decline 15% to 165.8 million in 1QFY18, from RM194.1 million, while revenue was almost flat at RM3.67 billion, a 1% drop from RM3.7 billion in 1QFY17.

As for the commercial division, PetDag said operating profit dropped 2% to RM119.1 million in 1QFY18, from RM121.3 million, while revenue gained 18% at RM3.4 billion, as compared to RM3.08 billion in 1QFY17.

According to PetDag, the lower earnings at both of its operations segments were due to higher product cost and increase in operating expenditure, following higher salaries, wages and benefit expenses dished out to its staff.

“The results of the group’s operations are primarily influenced by petroleum product prices which have strong correlation to crude oil prices (Brent), and Malaysia’s economic growth reflected in the gross domestic product, consumer sentiment index and manufacturing index,” the nation’s largest fuel retailer said in a filing with Bursa Malaysia today.

Going forward, PetDag said it will continue to focus on inventory management, supply and distribution efficiency, as well as optimising its operating expenditure, so as to ensure it continues to remain resilient. 

Looking ahead, PetDag said the retail market is anticipated to be competitive, as car sales have continued to decline since 2015, coupled with increasing number of energy efficient vehicles, as well as the rise in usage of public transportation and ride hailing services.

“Notwithstanding these challenges, Retail Segment will continue to strengthen its product branding and focus on elevating customer experience through superior fuel, continuous upgrading of stations and convenience stores, as well as consistently delivering high levels of service,” PetDag said.

In addition, PetDag also noted the retail segment will pursue strategic partnerships to provide added convenience to customers, as well as diversify its point-of-sales to grow in the e-commerce segment. 

As for its liquefied petroleum gas (LPG) and lubricant businesses, PetDag said it will focus on strengthening distribution channels to grow their market share.

Meanwhile, PetDag said the commercial business and bulk LPG sales will maximise value through effective sales strategies, leveraging on its superior logistics, personalised services and differentiated offerings to sustain existing markets and capture new markets.

Listed on the Main Market since March 8, 1994, PetDag operates more than 1,000 retail fuel stations, along with 725 convenience shops under the “Kedai Mesra” brand.

At 2:55pm, shares in the Main Market-listed PetDag was trading unchanged at RM26.36, valuing it at a market capitalisation of RM26.19 billion.