KUALA LUMPUR (March 7): Dividends declared in the financial year ended Dec 31, 2022 (FY2022) from listed companies linked to Petroliam Nasional Bhd (Petronas) were the second highest in the past five years.

This was on the back of sustained high prices for oil-related products, and further supported by the reopening of economic activities including in the upstream and shipping sectors.

The seven subsidiaries — Petronas Chemicals Group Bhd (PetChem), MISC Bhd, Petronas Dagangan Bhd (PetDag), KLCCP Stapled Group (KLCCP), Petronas Gas Bhd (PetGas), Bintulu Port Holdings Bhd, and Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) — cumulatively declared dividends totalling RM7.71 billion in FY2022.

This eclipsed annual payouts in FY2019 to FY2020 of between RM5.91 billion and RM6.72 billion, according to data compiled by The Edge.

However, it was a 25.52% drop from the RM8.93 billion paid in FY2021, which was boosted by bumper dividends from PetChem making up RM4.48 billion (50% of the total) following record earnings that year.

Of the RM7.71 billion in dividends declared in FY2022, Petronas is to receive RM4.55 billion from the subsidiaries, down from the RM5.33 billion in dividends it was paid in FY2021.

The bulk or RM2.11 billion comes from Petronas’ 64.35%-owned petrochemical-producing arm PetChem, but down from RM2.88 billion in FY2021, due to a lower full-year dividend per share (DPS) of 41 sen versus 56 sen last year.

Similarly, PetGas declared a lower DPS of 72 sen for FY2022 amounting to RM1.42 billion, from 82 sen per share or RM1.62 billion. Petronas, which owns 51% in PetGas, is to receive RM726.59 million from the gas infrastructure operator.  

Hit by higher opex, both PetGas and PetChem posted weaker earnings in FY2022 despite revenue hitting record highs.

PetChem’s full-year net profit fell 13.94% to RM6.32 billion in FY2022 from RM7.35 billion last year on lower plant utilisation, despite revenue rising 25.74% to RM28.95 billion versus RM23.03 billion.

PatGas suffered from higher gas consumption expenses, which caused a 17.27% decline in net profit to RM1.56 billion from RM1.99 billion, although revenue was up 9.1% to RM6.16 billion from RM5.65 billion.

Petronas’ 51%-owned shipping arm MISC Bhd maintained a DPS of 33 sen in FY2022 amounting to a RM1.47 billion payout, of which RM751.26 is to be paid to the national oil and gas (O&G) company. This is as FY2022 net profit dipped 0.55% to RM1.82 billion from RM1.83 billion, despite a 29.94% jump in topline to RM13.87 billion from RM10.67 billion.

Two Petronas companies that benefited from the reopening of the economy delivered higher dividends in FY2022, namely its retail fuel arm PetDag and its real estate investment trust, KLCCP Stapled Group.

PetDag paid out RM755.03 million in FY2022 as it raised DPS to 76 sen apiece from 70 sen in FY2021. From this, Petronas received RM482.61 million from the 63.94%-owned subsidiary.

In FY2022, sales rebounded to lift net profit by 46.59% to RM776.6 million from RM529.75 million, as revenue surged 62.07% to a record RM36.75 billion versus RM22.67 billion.

Meanwhile KLCCP’s FY2022 DPS rose to 38 sen versus 33.6 sen, on the back of a 57.84% rise in net profit to RM782.66 million, from RM495.85 million. This as revenue increased 24.61% to RM1.46 billion from RM1.17 billion.

It is also worth noting that Petronas-linked O&G fabrication outfit MMHE declared a dividend for the first time in five years, at 1.5 sen per share or RM24 million in FY2022. It last paid a dividend of three sen per share or RM48 million in FY2017.

MMHE returned to the black in FY2022, after a four-year stint in the red, with net profit of RM67.77 million versus a net loss of RM270.41 million in FY2021 as revenue climbed 12.56% to RM1.65 billion from RM1.47 billion.

Petronas holds a deemed interest in MMHE via a 66.5% stake held by MISC.

Port operator Bintulu Port, which is 28.52%-owned by Petronas, raised its DPS of 14 sen in FY2022 from 12 sen previously, despite a 64.8% fall in full-year net profit to RM127.72 million in FY2022 from RM363.19 million last year. FY2022 revenue grew 8.5% to RM791.26 million from RM728.39 million previously.

It is to pay out dividends totalling RM18.36 million to Petronas for FY2022, higher than the RM15.74 million paid out a year earlier. Other shareholders include the Sarawak state government (26.67%) and Kumpulan Wang Persaraan (Diperbadankan) 9.17%.

“With sustained oil prices, Petronas-related companies are able to maintain their dividends per share,” said Areca Capital chief executive officer (CEO) Danny Wong Teck Men, when asked about the payout trends of the Petronas-linked companies moving forward.

An analyst who covers the sector pointed to the correlation between expected Petronas dividends to the government and the dividends payouts from the listed units the year before, as seen in 2022 when Petronas paid RM50 billion after a bumper FY2021.

This year, the government anticipates Petronas to pay out a slightly lower RM40 billion, which is also in line with the smaller dividends from its listed entities in FY2022.

“That said, the upstream units’ profits will be very strong this time [to support Petronas dividends], and none of them is listed. I don’t see a strong case for [abnormal] Petronas subsidiary dividends,” the analyst said.