One reason to own Petron Malaysia

Petron Malaysia Refining & Marketing Bhd

The Petron Malaysia Group is part of Petron Corporation in the Philippines.

Petron Corporation joined Malaysia’s dynamic and progressive oil industry with the acquisition

of ExxonMobil’s downstream businesses in March 2012. Petron Malaysia subsidiaries comprise

of Petron Malaysia Refining & Marketing Bhd, a publicly-listed company listed on Bursa Malaysia,

Petron Fuel International Sdn Bhd, and Petron Oil (M) Sdn Bhd.

*Please refer to their annual report for more company information

One reason I like this company:

1. Company free cash flow -

You can see above since 2012 took over by Petron Philippines, the company generate positive free cash flow every year.

This company has massive borrowing since took over by 2012:

The borrowings at 2012 and 2014 as below:

(a) In April 2012, the Company entered into 5-year Working Capital Facility Agreement of RM900 million with Maybank Investment

Bank Berhad (as the agent) for working capital requirements, payment of inter affiliate payables and the refinancing of the

existing facilities and existing instruments then. Borrowings are normally settled within 30 to 60 days.

(b) In 2014, the Company entered into two 5-year Term Loan Facility Agreement of RM100 million each with Malayan Banking

Berhad and CIMB Bank Berhad.

Total borrowing – 1,100,000, then

The borrowings at 30^th September 2016 as below:

(a)Current

Revolving credit – unsecured 205,000

Long-term loan – unsecured 65,895

Total – 270,895

(b)Non-current

Long-term loan – unsecured – 108,520

Total borrowings – 379,415, now

Total borrowing reduced by RM720,585 almost 65.5% in 4 years period. Every year repayment of borrowings about RM180,146 (divided equally by four), if we turn the repayment of borrowing to dividend is about 0.66 cents per share. Dividend yield about 15%.

I foresee by early 2018, this company should be able to repay all their borrowings.

So what's next:

If the company can generate so much cash...how about dividend?

Last year dividend is about 4.8%

Don't forget this foreign owned company:

PETRON OIL & GAS INTERNATIONAL SDN BHD – 198,179,063 unit, 73.399%

How the Petron Philippines bring back the profit??? Too bad, I don't have the answer.

Note: For sharing purpose, not a recommendation to buy nor sell the stock