Dear MR. MANOJ DEVADASAN
General Counsel / Company Secretary / Manager-Human Resources/Compliance Officer
I would like to submit in advance my Petronm’s 64th AGM questions as below.
First and foremost, my congratulations to the BOD and Management team for another profitable year 2022 with increased EPS of 111.3 cents (FY 2022) Vs 88.3 cents (FY2021).
My many thanks and heartfelt gratitude to the BOD for giving increase dividend of 25 cents (FY2022) Vs 20 cents (FY 2021)
Question 1: I would like to make a request to the BOD for FY2023 please kindly consider splitting the dividend payment into 2 with interim dividend payment on Dec 2023 and final dividend on July 2024?
FY2022 annual report page 15: A newly opened station in Seremban 2 featuring the new design.
Question 2: What is the total cost for this newly opened station in Seremban 2, the expected IRR and payback period?
FY2022 annual report page 102:
Cash flows from investing activities: 2022 RM’000: 2021 RM’000
Acquisition of investment properties: (10,194): (7,047)
Acquisition of property, plant and equipment: (52,835): (147,706)
Payment for long-term assets: (5,248): (4,812)
Proceeds from disposal of property, plant and equipment: 87: 835
Proceeds from disposal of right-of-use assets: - :140
Net cash used in investing activities: (68,190): (158,590)
Question 3: FY2022 Net cash used in investing activities of RM 68,190,000, how much is used for retail service stations and for how many retail service stations?
Question 4: What is the investing budget for FY2023 and for building how many retail service stations?
From quarter 1 2023 financial report: Jan to March 2023
Cash flows from investing activities: RM’000
Acquisition of investment properties: (4,552)
Acquisition of property, plant and equipment: (10,961)
Payment for long-term assets: (3,029)
Capital commitments as at 31-03-2023: RM’000
Contracted but not provided for
Plant and equipment: 30,032
Investment properties: 21,806
Question 5: Since the big ticket investments were done in 2021(DHT facility and two 250,000-barrel product tanks) will the BOD consider a higher dividend payout from the EPS for FY2023?
FY2022 annual report page 139:
2022 RM’000: 2021 RM’000
Rental income: 47,562: 40,562
Question 6: Where does this rental income come from, reasons for 17% yearly increase from RM 40,562,000 FY 2021 to RM 47,562,000 FY 2022 and what is the expected rental income for FY 2023?
FY2022 annual report page 169: TOP 10 PROPERTIES AS AT 31 DECEMBER 2022
Question 7: Will the Management kindly provide us the full list of properties as at Dec 2022 or tell us where we can get a copy of the full list?
From FY 2022 quarterly financial report:
Quarter 1 2022: Gross profit RM 238,869,000, PBT RM 143,753,000. Loss on derivatives: 230,011,000
Quarter 2 2022: Gross profit: RM 415,620,000, PBT RM 240,671,000. Derivatives realized loss: RM 207,862,000. Unrealized loss; RM 166,799,000
Quarter 3 2022: Gross profit RM (136,556,000), PBT RM (29,137,000). Derivatives realized gain: RM 139,957,000. Unrealized gain: RM 7,588,000
Quarter 4 2022: Gross profit: RM 14,766,000, PBT RM (54,408,000). Loss on derivatives: RM 63,070,000
From Petronm 63th AGM minutes answer to question 18 and 21 on derivatives:
It is not a disadvantage for the company to have derivatives losses since there are corresponding higher physical inventory holding gains which benefit our gross profit.
There will be corresponding higher inventory holding gains even if there will be derivatives losses.
Your above statement on derivatives (loss)/gain is true for quarter 1, quarter 2 and quarter 3 but not on quarter 4.
Question 8: Please explain why quarter 4 loss on derivatives of RM 63,070,000 is much higher than the gross profit of RM 14,766,000?
Question 9: What were the volume (barrels) commodity swap contracts and average USD gain/(loss) per barrel matured on quarter 1, quarter 2, quarter 3 and quarter 4 FY2022?
FY2022 annual report page 167 & 168
As at 20 March 2023
THIRTY LARGEST SHAREHOLDERS
No. of Units Held: % of Issued Capital
TOTAL: 219,257,798: 81.206
Question 10: With NOSH of 270,000,000 only about 50,742,202 units were held outside of these 30 largest shareholders. Would the BOD consider one to one bonus issues to increase the NOSH so that more people will be able to participate in Petronm share ownerships and become loyal supporters and customers of Petron Service Station?
Have a good day
Lee Soon Sheng