Petronas Dagangan’s FY23 ends with CNP of RM980 million

KUCHING: Petronas Dagangan Bhd’s (Petdag) financial year 2023 (FY23) results have ended with a core net profit (CNP) of RM979.9 million, translating to a 30.3 per cent year on year (y-o-y) growth.

In a results review report, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) said that the results were within their expectations and excluded several one-off items such as a RM23.1 million impairment loss on receivables, a RM17.2 million impairment on property, plant & equipment, a RM8.9 million impairment writebacks and a RM5.0 million net forex loss.

The group’s revenue during the period grew by 2.2 per cent y-o-y to RM37.549 billion due to higher sales volume from its retail sector but was partially offset by a weaker sales numbers from its commercial division due to lower selling prices.

The robust double digit y-o-y growth in its CNP however, was largely driven by improved jet fuel spreads in its commercial division.

Sequentially, the group’s 4QFY23 revenue grew by 1.6 per cent to RM10.075 billion due to higher retail sales while it’s CNP dropped marginally by 1 per cent to RM188.1 million as losses in its convenience division, associates and joint-ventures outpaced the improved profits from its retail and commercial divisions.

Looking ahead, Kenanga Research expected Petdag’s retail volume in FY24 to remain mostly stable while its commercial division is poised for growth due to an anticipated increase in business activities. That said, they noted a risk that the impending fuel subsidy rationalisation may drag its retail volume.

“But past experience points to the impact being temporary,” the research arm reasoned.

Adding to this, analysts at MIDF Amanah Investment bank Bhd’s research arm (MIDF Research) opined that Petdag’s main focus in FY24 may likely shift towards its non-fuel business, given that its maintenance and repairs were extensive in 2023.

“Additionally, Petdag had been anchoring its Café Mesra brand nationwide, which underscores Petdag’s commitment to enhancing customers’ experiences,” they mused.

MIDF Research also added that Petdag has also been actively engaged in various clean energy initiatives such as solar-powered petrol stations and increased partnerships with EV charging points.

“We believe these efforts would assist Petdag in capitalizing on the clean energy industry and possibly add in another nonfuel revenue to its Convenience segment,” it concluded.