KUALA LUMPUR (Nov 4): Petronas Dagangan Bhd (PetDag), the principal marketing arm of Petroliam Nasional Bhd (Petronas), recorded a 29.1% on-year drop in its net profit to RM160.40 million in the third quarter ended Sept 30, 2014, from RM226.21 million.
 
Revenue for the period under review slipped a marginal 2.2% on-year to RM8.23 billion from RM8.41 billion, mainly due to a decrease in sales volume by 4% despite an increase in average selling price by 2%, the group said in its filing to Bursa Malaysia today.

Its cumulative nine months profit (9MFY14) also dropped 24.1% on-year to RM501.12million from RM660.43million, even though revenue was up 3.89% to RM24.89 billion from RM23.96 billion. Nevertheless, the group also announced a single-tier dividend of 12 sen per share for 3QFY14, to be paid on Dec 5.

The group said its operating profit for 3QFY14 was at RM230.7 million, down 26.8% on-year from RM315.3 million, mainly as a result of lower gross margin by RM100.9 million, which is primarily a result of higher product cost due to unfavourable timing differences of the prices on the Mean of Platts Singapore – a measure of fuel oil pricing in Singapore – compared to the previous corresponding quarter.

“The challenging and volatile external market environment, particularly the unfavourable MOPS price movement and decrease in sales volume for diesel, have impacted our performance this quarter,” said PetDag managing director and chief executive officer, Mohd Ibrahimnuddin Mohd Yunus, in a separate media statement.
 
“Despite the tougher and competitive market conditions, we are determined to grow our four core businesses in the longer term via the initiatives which we have put in place. We are constantly looking at growth opportunities within our businesses to enable PetDag to further strengthen its overall market leadership position,” he added.
 
PetDag said the unfavourable MOPS price movements had impacted its gross profit by RM70.5 million while the lower sales volume of diesel by 71.3 million litres was a result of the stricter controls on the sale of diesel imposed by the regulatory agency.

Its earnings per share for the quarter under review came in at 16.1 sen, down 6.7 sen from 22.8 sen during the same quarter last year.

“It has been a challenging year thus far with the volatile external market environment and intensified competition. We take it as a challenge for us to push harder and seize the market opportunities to become a clear brand of first choice in the retail industry,” said Ibrahimnuddin.

The group's shares closed 2 sen down at RM20.50 today, giving it a market capitalisation of RM20.37 billion.