KUALA LUMPUR (Feb 25): Petronas Dagangan Bhd’s (PetDag) net profit jumped 171% to RM126.59 million or 12.7 sen per share in its fourth quarter ended Dec 31, 2019 (4QFY19), from RM46.68 million or 4.7 sen per share in the year-ago quarter.

The impressive set of quarterly results was attributed to higher sales volume and better gross profit following the higher Mean of Platts Singapore (MOPS) prices.

There was also an increase in interest income as a result of larger cash balances, said PetDag in a filing to Bursa Malaysia. However, higher advertising and promotion, depreciation and amortisation costs as well as network upgrade costs had offset the earnings growth.

The board declared an interim dividend of 25 sen per share and a special dividend of 15 sen per share for 4Q19, payable on March 26. 

In the previous corresponding quarter, PetDag paid an interim dividend of 25 sen per share.

The exchange filing today showed that PetDag achieved quarterly net profit growth although its quarterly revenue was almost flat at RM7.79 billion versus RM7.90 billion in 4QFY18, as a 4% drop in average selling prices had offset the 3% increase in sales volume.

For the full financial year ended Dec 31, 2019 (FY19), PetDag’s net profit totalled RM829.54 million, lower by 2.4% compared with RM849.85 million in the preceding year. Annual revenue held steady at RM30.29 billion compared with RM30.07 billion in FY18.

According to PetDag, the weaker profitability was mainly due to higher operating expenses as stated above, offset by an improved gross profit, higher sales volume and an increase in interest and income from Kedai Mesra.

The group said the volatility of oil prices, economic conditions and consumer sentiment will have an impact on the group’s profitability but said that it will continue to focus on inventory management, supply and distribution efficiency as well as operating expenditure optimisation to ensure resilience.

It said it plans to grow volume at its retail segment from its newly launched superior products and focus on enhancing customer experience through a nationwide expansion of an advanced retail intelligence platform that upgrades fuel payments among other retail experiences for Petronas users.

It also plans to increase its profitability by pursuing strategic partnerships and enhancing product offerings.

Meanwhile, it said its commercial and LPB business will continue to maximise value by providing superior value propositions through enhancing channel delivery and differentiated offerings, having competitive pricing, leveraging superior logistics and distribution network to sustain existing markets and capturing new ones.

Separately, PetDag announced today the resignation of Norliwati Abdul Wahab from her position as chief financial officer, citing "staff mobility within the Petronas group" as a reason.

She will be succeeded by 43-year-old Farzlina Ahmad Murad, who is the incumbent head of finance at Petronas Chemicals Group Bhd's downstream business, among other positions.

Shares in PetDag dropped 20 sen today at RM21.40 in thin trade, bringing it a market capitalisation of RM21.26 billion.