Petronas Dagangan Bhd's net profit for the first quarter ended March 31, 2024 (1QFY2024) fell 25% year-on-year to RM226.04 million, from RM301.84 million previously, on higher product cost and operating expenditure. (Photo by Low Yen Yeing/The Edge)

KUALA LUMPUR (May 21): Petronas Dagangan Bhd's (KL:PETDAG) net profit for the first quarter ended March 31, 2024 (1QFY2024) fell 25% year-on-year to RM226.04 million, from RM301.84 million previously, due mainly to higher product cost and operating expenditure.

In a bourse filing on Tuesday, PetDag said revenue for the quarter rose to RM9.39 billion, from RM8.65 billion a year earlier.

Earnings per share dipped to 22.8 sen from 30.4 sen.

PetDag declared an interim dividend of 18 sen per share amounting to RM178.82 million for the latest quarter.

Reviewing its performance, the company said the average oil price stood at US$83.16 (RM390.17) per barrel in 1QFY2024, with a marginal 1% decrease compared with the previous quarter at US$84.34 per barrel.

It said market fluctuations were influenced by a decline in oil demand growth, particularly in China early in the quarter, negated by a price spike caused by heightened tensions in the Middle East by early February. The Organization of the Petroleum Exporting Countries and its allies' (Opec+) strategic decision to prolong production cuts into 2QFY2024 further tightened oil supply.

PetDag said despite market volatility, the group achieved a steady revenue growth in 1QFY2024, driven by increased sales volumes and continuous impact of promotional campaigns, a strategic focus on commercial growth in the fleet and transportation sectors, as well as a tourism-driven rebound in passenger traffic.

Commenting on its prospects, PetDag said the average Brent crude oil price is forecast at US$88.70 per barrel in 2QFY2024, amid ongoing Opec+ production cuts.

“However, a potential increase in Russian crude oil exports is anticipated to balance the market by boosting oil supply.

“PetDag expects continued growth in its retail and commercial business segment, on the back of strong domestic economic activities and a recovery of the aviation industry, while the convenience store segment continues its focus to expand Café Mesra and Kedai Mesra offerings and campaigns during the festive season in 2QFY2024,” the company said.

PetDag shares closed 48 sen or 2.27% lower at RM20.70 on Tuesday, giving the group a market capitalisation of RM20.56 billion. Year to date, the counter eased 4%.