KUALA LUMPUR (Aug 6): Petronas Dagangan Bhd (PetDag)’s net profit jumped 47% on-year in its second quarter ended June 30, 2015 (2QFY15) to RM273.21 million or 27.5 sen per share, from RM185.65 million or 18.7 sen per share, on lower operating expenditure.

The group also declared an interim dividend of 14 sen per share for the quarter, to be paid on Sep 22, 2015, its filing with Bursa Malaysia today showed.

PetDag said the lower operating expenditure was mainly due to lower bonus provision for its financial year ending Dec 31, 2015 (FY15) resulting in lower manpower expenses for the current quarter.

Lower advertising and promotions expenses, together with other cost reduction efforts, also contributed to the lower operating expenditure.

The group also attributed its increase in profitability for the quarter to higher margin contribution from both its retail and commercial segments.

However, PetDag’s latest quarterly revenue dropped 22% to RM6.49 billion from RM8.37 billion in 2QFY14, as average selling price fell 17%, coupled with a 6% decline in sales volume.

The decrease in average selling price was in line with the decline in Means of Platts Singapore prices beginning June 2014, it noted.

For its cumulative six months (1HFY15), PetDag’s net profit rose 41% on-year to RM478.98 million from RM340.73 million, due also to the reduction in operating expenditure.

Revenue for 1HFY15, however, fell 24% to RM12.59 billion from RM16.66 billion previously as a result of a 20% decrease in average selling price, coupled with a 6% drop in sales volume.

PetDag managing director and chief executive officer Mohd Ibrahimnuddin Mohd Yunus said PetDag’s operating expenses reduction efforts have borne fruit for the group.

“The measures undertaken in managing operating expenses through cost reduction efforts, inventory optimisation and enhancing supply and distribution efficiency is paying off,” he said in a statement.

On prospects, PetDag said its retail segment will continue to push for sales of petroleum products, leveraging on the PETRONAS PRIMAX 95 with Advanced Energy Formula.

The group will also focus on improving margins in its commercial segment and as well as widening its customer base.

PetDag (fundamental: 1.7; valuation: 1.1) shares closed 8 sen or 0.37% higher today at RM21.44, for a market capitalisation of RM21.3 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)