KUALA LUMPUR (Nov 8): Petronas Dagangan Bhd (PetDag), a 69.86%-owned subsidiary of Petroliam Nasional Bhd, saw its net profit rise 13.7% to RM248.76 million or 25 sen a share in the third quarter ended Sept 30, 2016 (3QFY16), from RM218.88 million or 22 sen a share a year ago, mainly contributed by its retail business.

Revenue, however, fell 14.9% to RM5.54 billion in 3QFY16 from RM6.51 billion in 3QFY15, mainly due to a decrease in average selling price by 13% coupled with lower sales volume of 2%.

The decrease in average selling price was due to the decrease in Mean of Platts Singapore (MOPS) prices.

It also declared an interim dividend of 14 sen per share amounting to RM139.08 million for the financial year ending Dec 31, 2016 (FY16), payable on Dec 8.

For the cumulative nine months (9MFY16), PetDag's net profit slipped 2.1% to RM683.12 million from RM697.86 million a year ago, on the back of lower revenue of RM15.78 billion in 9MFY16, down 17.1% from RM19.04 billion in 9MFY15.

In a filing with Bursa Malaysia today, PetDag said it expects to complete the sale of its subsidiary Thang Long LPG Co Ltd (TLLCL) by the end of 2016. On Sept 30, 2016, TLLCL comprised assets amounting to RM15.9 million less liabilities of RM100,000.

On prospects, PetDag expects the oversupply situation in the global market to remain, at least through the first half of 2017, resulting in continued price volatility. Oil price increased slightly to US$45.90 (RM193.49) per barrel in 3Q16 from US$45.60 per barrel in 2Q16.

"The directors are of the opinion that the economic and business environment outlook for FY16 remains challenging. The group will continue to focus on inventory management, supply and distribution efficiency, as well as operating expenditure optimisation to ensure the group remains resilient in the face of a challenging environment," it said.

PetDag shares closed up 2 sen or 0.09% at RM23.36 today, bringing a market capitalisation of RM23.21 billion.