KUALA LUMPUR: Petronas Dagangan Bhd (PetDag), a 69.86%-owned subsidiary of Petroliam Nasional Bhd, saw its net profit for the fourth quarter ended Dec 31, 2014 (4QFY14) plunge 99.7% to RM445,000 from RM151.32 million a year ago, mainly due to a decrease in sales volume and average selling price.

Revenue for 4QFY14 also dropped 11% to RM7.45 billion from RM8.39 billion in 4QFY13. PetDag’s (fundamental: 1.8; valuation: 0.9) operating profit was lower at RM16.2 million from the year-ago period as a result of lower gross profit from the group’s retail segment. Earnings per share (EPS) for 4QFY14 dropped to 0.04 sen from 15.20 sen as a result of lower profit. Nevertheless, the group declared a special dividend of 22 sen per share for the quarter, payable on March 27.

For the full year (FY14), PetDag’s net profit fell 38.2% to RM501.57 million from RM811.75 million the previous year due to the lower gross margin attributed to the steep decline in global crude oil prices.

Revenue fell slightly by RM924,000 to RM32.34 billion from FY13, largely due to the decrease in sales volume. EPS for FY14 was lower at 50.5 sen from 81.7 sen in FY13. In a statement yesterday, PetDag managing director and chief executive officer Mohd Ibrahimnuddin Mohd Yunus said in a statement that “the downward trend of crude oil prices and decrease in sales volume have impacted our overall performance”.

The overall retail business saw a decrease in revenue of 8% (in FY14), mainly  due to a decline in sales of diesel, said Ibrahimnuddin in the statement.  In the commercial segment, the decrease in gross profit by 2% in FY14 was mainly due to lower sales volume by 7% against the previous year. On prospects, PetDag said the economic and business environment will continue to be challenging.

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This article first appeared in The Edge Financial Daily, on February 13, 2015.