Petronas Dagangan to spend less on capex in FY18

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KUALA LUMPUR (April 25): Petronas Dagangan Bhd (PetDag), the marketing arm of Petroliam Nasional Bhd, will spend RM300 million on capital expenditure (capex) this year, lower than last year’s RM400 million, primarily on upgrading and refurbishing its existing petrol stations and Mesra convenience stores. 

Its managing director and chief executive officer Datuk Mohd Ibrahimnuddin Mohd Yunus said the company will continue its strategy of reimagining Mesra stores with different offerings from various partnerships in order to elevate customer experience, so as to grow the sale of its fuel and non-fuel products. 

“We have the largest (petroleum retail) network in Malaysia today. We have about 1,045 stations across the country. So, the key focus for us this year will not be growing the network very much. But even then, we are still looking at adding 10 to 15 more stations,” he told a press conference, after the company's annual general meeting today.  

Ibrahimnuddin said he is confident with the company’s retail segment, given the fact that no Petronas petrol station had closed down out of more than 300 closures recorded industry-wide last year. 

On its commercial segment, Ibrahimnuddin said PetDag had recently secured three new contracts to supply jet fuel to international airlines such as US-Bangla Airlines, Himalaya Airlines and Air Seoul, which will commence this year. 

Contracts for airline jet fuel supply are typically for a minimum of six months and can go on up to two years, he added. Ibrahimnuddin did not clarify the value of the contracts, but said it was substantial.   

“We command about 70% of the the local airline jet fuel market share,” Ibrahimnuddin added. 

For the financial year ended Dec 31, 2017 (FY17), 90% of PetDag's earnings were contributed by the retail and commercial segments and the remaining 10% came from its liquid petroleum gas and lubricants business. 

PetDag achieved another record year in FY17, on the back of improved margins and gain from disposal of its subsidiaries. Its net profit was 68.7% higher at RM1.59 billion, while revenue was at RM26.74 billion, up 24.2% year-on-year.