7 August 2014, Kuala Lumpur – PETRONAS Dagangan Berhad (PDB) registered a revenue of RM8,368.0 million for the quarter ended 30 June 2014, an increase of RM443.1 million as compared to the corresponding quarter last year, despite the challenging market environment.

While the revenue for the period under review grew as compared to the corresponding quarter last year, the Profit Before Tax (PBT) has decreased by RM22.2 million amounting to RM250.8 million. The decline in PBT is mainly attributable to the higher operating expenses (OPEX) during the quarter and a gain in unrealised foreign exchange from Aviation contracts due to the strengthening of USD during the corresponding quarter last year.

“It has been a challenging year thus far with increased competition and volatile market conditions. However, we have remained committed to grow our business by taking a longer term perspective and investing in strengthening our four core businesses,” said Mohd Ibrahimnuddin Mohd Yunus, Managing Director and Chief Executive Officer of PDB.

“Recognising the rising costs and tougher market, we have ensured that our operating expenses were at an optimum level to remain competitive,” he added.

The higher OPEX was attributable to an increase in the manpower and ICT costs. The increase in the manpower costs is mainly due to the implementation of the minimum wage policy which in turn resulted in the increase in salaries and wages, especially for contract manpower and security services employees.

Ibrahimnuddin said, “As a responsible corporation, we have revised our compensation particularly for the lower income group to reflect the minimum wage policy and accommodate the higher cost of living.”
“Our ICT costs increased as a result of our improved efforts to ensure effective maintenance of our electronic card payment systems at our stations. The increase in cost is to cater to the increasing number of credit card fuel purchase transactions at retail stations. This is a testament of PDB’s commitment to providing convenience to our customers, thus enhancing customer experience at our stations,” he added.

Earnings per share decreased to 18.7 sen from 19.8 sen for the same quarter in the previous year. Shareholders’ fund as at 30 June 2014 was RM4,837.0 million, increased by RM46.9 million compared to last year due to net profit registered for the period of RM340.7 million less dividend paid to shareholders amounting to RM293.1 million.

The Retail Business continued to be the main contributor of the Company’s revenue growth, recording an increase of 2% for its overall sales volume as compared to the same quarter last year. The growth was a result of its ongoing network expansion and the launch of the new fuel, PETRONAS PRIMAX 95 with Advanced Energy Formula.

PDB is also on track to operationalize between 30 to 40 stations targeted for 2014. As another feather to the cap, the PETRONAS network of stations was also awarded the Reader's Digest Trusted Brand Gold Award™ 2014 in the petrol stations category.

“An example of our long-term investment is our partnership with the MERCEDES AMG PETRONAS Formula OneTM Team, which has been performing exceptionally well in the 2014 season, winning nine out of eleven races. This partnership has made the PETRONAS PRIMAX and PETRONAS Syntium brands synonymous with international quality and superior performance,” said Ibrahimnuddin.
On the Commercial Business side, while the overall sales volume registered a 9% decrease, the aviation segment continued to deliver higher sales volume of 1%. Moving forward, the Commercial Business has adopted a strategic approach to focus mainly on the high value and high margin segment to drive profitability.

Meanwhile, the LPG Business remained steady as Malaysia’s No.1 Cooking Gas with an increase of 3% in its domestic sales volume compared to the same quarter last year, with household cylinder continuing to be the main driver. Operational excellence and supply synergies will remain as the agenda for the subsequent quarters as the LPG Business continues to sustain its domestic market leadership position.
On the Lubricants Business front, despite the very challenging segment, the volume saw an increase of 2% attributed to the newly launched PETRONAS Syntium 7000 and the inroads made in the highstreet segment. The network of PETRONAS LubeXperts has continued to grow during the period under review. The target is to have a total of 80 outlets by the end of this year.

“To ensure sustainable delivery of value to our shareholders as we work towards being the Brand of 1st Choice, PDB will continue to focus on longer term perspectives and invest in strengthening our four core businesses,” concluded Ibrahimnuddin.