KUALA LUMPUR (Aug 25): After Tenaga Nasional Bhd, Petronas Dagangan Bhd (PetDag), another big-cap company, is facing rising receivables.

PetDag reported a big leap in its quarterly net profit for the second quarter ended June 30, 2022 (2QFY22), but so did its receivables, which almost tripled to RM10.3 billion from RM3.49 billion a year ago.

The sharp rise in receivables gave a big boost to the group’s total assets, which soared to RM17.25 billion as at June 30, from RM9.6 billion a year ago.

In its quarterly results filing to the stock exchange, PetDag said the RM7.65 billion — about 80% — asset jump was mainly “due to delay in subsidy receivable, as well as increase in prices”.

PetDag, in which Petroliam Nasional Bhd (Petronas) controls a 63.92% stake, also warned that the prolonged impact of “the outstanding subsidy receivable will however pose a challenge to the group's profitability and liquidity position”.

“Nevertheless, we are working towards resolving the situation in due course. The group will diligently monitor and implement measures to minimise any adverse impact from this situation,” it said in the filing.

Interestingly, the group’s total liabilities also swelled by RM7.59 billion as its main supplier extended credit terms, in addition to higher purchase price.

The extended credit terms by its main supplier appears to be a relief for PetDag, who would otherwise be facing a tight cash flow situation like Tenaga.

The group’s cash balance increased to RM2.65 billion as at June 30, from RM1.91 billion a year ago. Its cash balance was at RM2.59 billion three months back.

Stellar set of quarterly results

PetDag declared an interim dividend of 11 sen per share, payable on Sept 22, after delivering a strong set of quarterly earnings.

The group’s net profit jumped 189% year-on-year in the April-June period to RM237.68 million from RM82.14 million, mainly due to higher gross profit from the retail segment, in line with higher volumes sold during the quarter under review.

Quarterly revenue soared 83.3% to RM9.5 billion in 2QFY22 from RM5.18 billion in 2QFY21, as sales volume jumped 36% and average selling prices rose 34%. Earnings per share swelled to 23.9 sen, from 8.3 sen.

Meanwhile, the group’s cumulative net profit for the six months ended June 30, 2022 (1HFY22) climbed 30.35% to RM356.17 million, from RM273.25 million in 1HFY21. Cumulative revenue grew 65.8% to RM17.12 billion, from RM10.32 billion.

PetDag said the increase was also contributed by higher other income following a once-off gain of RM40 million from the disposal of liquefied petroleum gas (LPG) business in Sarawak on March 9, offset by higher operating expenditure, which was mainly attributable to dealer’s commission.

In terms of prospects, PetDag said the group is on track to maintain its growth recovery on the back of positive economic developments, though it remains cautious due to the volatility of crude oil prices.

PetDag has three operating segments, comprising retail, commercial (sales and purchase of petroleum products) and convenience (non-fuel business activities).

It said the commercial business will provide a superior value proposition to its customers, as it observed the rapidly changing energy market and industry dynamics.

“The non-fuel market will strengthen further with the opening of more Mesra Café locations nationwide, as we aim to leverage our existing network and infrastructure to widen our reach, improve our retail offering and future-proof our business,” it said.

As for the group’s sustainability agenda, PetDag said it will collaborate with established electric vehicle (EV) industry partners in order to accelerate the adoption and commercialisation of clean energy, in line with the government’s target of becoming a carbon-neutral nation by 2050, with full-tax exemptions on EV starting 2022.

PetDag's share price dropped 40 sen or 1.79% to close at RM21.94 on Wednesday (Aug 24), valuing the group at RM21.8 billion.