KUALA LUMPUR (Aug 21): Petronas Dagangan Bhd (PetDag) recorded a 14% rise in net profit for its second quarter ended June 30, 2017 (2QFY17) to RM246.04 million from RM214.95 million a year ago, as both its retail and commercial segments reported better operating profits with higher selling prices.

Quarterly revenue grew 22% year-on-year to RM6.51 billion from RM5.33 billion as average selling prices (ASP) rose 28%, although the improved topline was offset by a 5% drop in sales volume, the group said in a filing with the stock exchange today.

It announced an interim dividend of 14 sen per share in respect of FY17, to be paid on Sept 19.

Segmentally, retail registered lower depreciation and amortisation, as well as higher other income of RM10.5 million from an asset disposal. Last year, the segment booked an impairment of subsidy receivables.

Meanwhile, its commercial segment saw improved margins from aviation fuel, which was mainly contributed by newly-secured contracts and increased flight frequencies by several airlines, as well as lower operating expenditure, PetDag said.

Higher revenues were reported in both segments despite a drop in volume due to increased ASP.

Separately, liquid petroleum gas (LPG) recorded an 11% decrease in gross profit compared with the previous year’s corresponding quarter due to aggressive competition within the industry, PetDag said in a statement.

It added that the lubricant business also saw a decline in gross profit by 22% over the quarter due to higher product costs.

For the six-month period ended June 30, 2017 (1HFY17), the group posted a 15% rise in net profit to RM499.2 million from RM434.35 million previously, also on improved results from both the retail and commercial segments.

However, PetDag noted that its better operating profits were offset by higher professional services fees in its retail segment, and higher transportation costs and lower interest income in its commercial segment.

1HFY17 revenue was up 29% to RM13.19 billion from RM10.24 billion in the previous year's corresponding period, on a 35% rise in ASP following the higher Mean of Platts Singapore (MOPS) prices, though again the impact of this was offset by a 5% decline in sales volume, the group said.

Going forward, the group said that it would continue to seek strategic partnership opportunities to provide added convenience to customers, as well as focus on enhancing its customer experience through superior products and services.

“For our commercial business, we will emphasise value maximisation by improving margins in targeted products and market segments,” said PetDag managing director and CEO Datuk Mohd Ibrahimnuddin Mohd Yunus.

“For the LPG business, efforts will be invested into defending our market leadership while for lubricants, we will focus on growing higher margin products,” he said.

Shares in PetDag closed unchanged at RM24 today, giving the group a market capitalisation of RM23.84 billion.