This article first appeared in The Edge Financial Daily on August 23, 2019

KUALA LUMPUR: Petron Malaysia Refining & Marketing Bhd reported a drop in net profit for the fourth straight quarter, as bottom line was hurt by lower gross profit and unrealised commodity losses.

For the second quarter ended June 30, 2019 (2QFY19), Petron’s net profit slumped 39% to RM56.22 million from RM92.42 million, while revenue retreated 3% to RM3.02 billion from RM3.13 billion amid lower oil prices, despite having secured slightly higher sales volume.

“While dated Brent crude has recovered from the sharp decline in prices during the last two months of 2018, global oil prices remained volatile during the quarter with dated Brent averaging US$69 per barrel or 7% lower than the same quarter last year.

“Price differentials between finished products and crude remained narrow, resulting in a lower gross profit of RM134 million or 15% lower than RM158 million last year,” Petron said in a filing with Bursa Malaysia.

The weaker 2QFY19 results dragged Petron’s net profit for the first half of FY19, down 30.88% to RM113.74 million from RM164.55 million. Revenue fell 1% to RM5.77 billion from RM5.85 billion previously.

Meanwhile, as oil prices continued to be volatile in the second quarter, Petron said it remains cautious as it sees more uncertainties in oil prices during the year amid the re-escalation of US-China trade war and ongoing geopolitical tensions. Nevertheless, the group noted that the Malaysian economy outlook remains positive.

In a separate statement, Petron chairman Ramon S Ang said the group still managed to deliver modest results, thanks to continued sales growth, despite thinning refining margins. “We remain committed to pursuing strategic programmes aimed at strengthening our brand, increasing our presence, and providing excellent products and services to our customers,” he said.