PetDag budgets RM500 million capex for retail segment for FY21

PetDag budgets RM500 million capex for retail segment for FY21
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KUALA LUMPUR (April 25): Petronas Dagangan Bhd (PetDag), the marketing arm of Petroliam Nasional Bhd, has budgeted about RM500 million of capital expenditure (capex) for its retail segment for the financial year ending Dec 31, 2021 (FY21).

"The capex will be spent to renew some petrol stations, acquire new strategic sites, and enhance our non-fuel businesses that includes Kedai Mesra and food solutions services," said head of retail business Khalil Muri.

He said currently there are more than 1,000 Petronas stations and 800 Kedai Mesra nationwide, and the company intends to add 1%, or five to 10 stations, yearly to secure the highest presence and biggest network in Malaysia.

Despite the rising number of Covid-19 cases, he said the company remains very positive about the outlook of its retail segment in FY21, backed by improved crude oil prices, a return to normality of traffic volume, and higher demand for its non-fuel businesses.

Khalil was hosting a virtual press conference for Bernama, The Star, and Harian Metro on Friday.

Businesses offered under PetDag's retail segment include fuel and non-fuel products and services such as Kedai Mesra, Petronas Smartpay and Petronas Mesra loyalty programme.

Khalil said the current international benchmark Brent crude oil price, which has risen to between US$65 and US$66 per barrel from an average of US$41.96 per barrel last year would help boost the retail's revenue this year.

"This is because higher oil prices will help drive our overall profitability," he said.

Meanwhile, he said the company has also seen an increase in its non-fuel businesses due to a higher demand, as people have started returning to their workplaces and taking advantage of the convenience of ready-to-eat food solutions.

"Hence, for this year, we intend to grow our non-fuel businesses by 15%-20%, and sell more fuel by about 5%-10% from 2020, which will contribute to our growth in the retail segment," he said.

On the new Petronas Primax 97 with Pro-Race launched in December last year, Khalil said the "best ever fuel" offered by PetDag has also received positive response from customers.

Overall, Khalil expects the retail segment to contribute to about 40% of the group's total revenue for FY21, slightly lower than about 47% contributed in FY19, as the aviation industry was still taking a big hit from the pandemic.

In its filing with Bursa Malaysia in February this year, PetDag said the retail segment revenue decreased by RM4.19 billion year-on-year for FY20, mainly due to a decrease in average selling prices by 16%, as well as lower sales volume of 13%, in tandem with lower demand.

On the average selling price, Khalil does not expect the increasing fuel prices to affect demand fundamentally.

The government has capped the retail price for RON95 at RM2.05 per litre and RM2.15 per litre for diesel, while price of RON97 is floated according to the market price.