Latest news with #PetDag
The Star
26-05-2025
- Business
- The Star
Commercial division to drive PetDag volume growth
PETALING JAYA: Petronas Dagangan Bhd (PetDag), the listed operator of Petroliam Nasional Bhd (PETRONAS) stations nationwide, enters the year with the widely anticipated RON95 petrol subsidy rationalisation to be implemented in the second half of 2025. Analysts were mixed on their views for its outlook following the release of the company's first quarter ended March 31, 2025 (1Q25) results last Friday, with CGS International Securities noting that the RON95 subsidy rationalisation move may impact retail volumes, already suffering from inflationary pressure. It cited that there had been a 2% year-on-year and quarter-on-quarter decline in overall sales volume in 1Q25. The research house maintained a 'reduce' call on the stock with an unchanged target price of RM16.74. While it noted that 1Q25 earnings were broadly in line with its financial year ending Dec 31, 2025 (FY25) estimates, there could be more downward pressure in the second half of 2025. Kenanga Research, which has maintained an 'outperform' call on the stock with an unchanged target price of RM21.20 per share, noted that retail volumes were expected to remain weak in FY25 due to overall cautious consumer sentiment, but this would be offset by the company's optimised cost structure. 'Its commercial division is expected to remain the driver for volume growth in the near term due to healthy demand,' the research house said. TA Research said the top 15% of household income earners would not significantly reduce their consumption despite the RON95 subsidy rationalisation. However, the research house did not discount the possibility that the government might widen the scope of the rationalisation to other income groups, especially in the context of driving the transition to cleaner transportation modes such as electric vehicles and public transportation. TA Research has raised its target price for PetDag to RM19.10 apiece from RM18.20, but maintained a 'sell' call on the stock given the limited upside from current share price levels.
New Straits Times
26-05-2025
- Automotive
- New Straits Times
PetDag to see margin gains in Q2 as jet fuel costs ease
KUALA LUMPUR: Petronas Dagangan Bhd's (PetDag) commercial segment may see further margin expansion due to the declining trend in Jet Fuel Mean of Platts Singapore (MOPS) costs, said Hong Leong Investment Bank Bhd (HLIB Research). The firm said this would likely be driven by the downswing in oil prices following Liberation Day in the second quarter of 2025 (2Q25). However, HLIB Research said volume is expected to moderate slightly due to the absence of two festive holidays in 1Q25. It added that the group's retail division should also improve quarter-on-quarter (QoQ) in 2Q25, driven by better diesel sales volume resulting from a higher number of working days compared to 1Q25. "As such, we expect PetDag's earnings to be frontloaded in the first half of 2025 (1H25), with QoQ growth in 2Q25, while 2H25 should see some moderation as the commercial segment slides from a high base," it noted. Meanwhile, HLIB Research also believes that the targeted subsidy programme for RON95 (likely to roll out in 2H25) will have a muted impact on PetDag's overall sales volume. It added that, at least in the near term, the impact will be limited since the subsidy will mainly affect the T15 population segment, who are able to absorb the price hikes. "Moreover, Malaysia's automotive sector total industry volume reached a record high of 817,000 units in 2024, with electric vehicles accounting for only 5.6 per cent. "Thus, we reckon the demand for RON95 will remain supported by the dominant mix of internal combustion engine cars in Malaysia in the near to medium term," it said. Overall, HLIB Research has maintained a 'Buy' call on PetDag, with a target price of RM22.38, as it views PetDag's risk-reward profile as favourable, given its ability to sustain diesel sales volume following the subsidy cuts. "We reckon the market might have overestimated the impact of the subsidy rationalisation programme on PetDag's earnings outlook. "Also, the stock commands an attractive financial year 2026 (FY26) forecast dividend yield of 5.5 per cent, based on the current share price," it said. RHB Investment Bank Bhd (RHB Research) cautioned that the impact of the RON95 subsidy rationalisation on PetDag's retail sales volume will largely depend on the specifics of its implementation. It added that the government remains committed to implementing the RON95 subsidy rationalisation in 2H25, with an official announcement from the Ministry of Finance expected soon. The subsidy is still expected to cover 85 per cent of the population. "However, the latest reports stated that Prime Minister Datuk Seri Anwar Ibrahim disagreed with the Cabinet's proposal of a fuel price hike and suggested that the subsidy removal should instead apply to foreigners. "Depending on the implementation mechanism, we do not discount the possibility of this having a negative impact on retail sales volume, including a potential reduction in illegally exported motor gasoline," it said. PetDag's retail sales volume fell 11 per cent year-on-year (YoY) on lower diesel sales, but its commercial sales volume increased by 13 per cent YoY in 1Q25. The convenience segment also continued to deliver better profitability, up 40 per cent YoY in 1Q25, driven by lower opex despite flattish Petronas Shop merchandise sales. As such, RHB Research has maintained a "Neutral" view on PetDag, with a higher target price of RM18.90, up from RM18.37 previously. It remains cautious on the group's outlook, as the share price overhang may persist pending uncertainties over the impending implementation of the RON95 subsidy rationalisation starting in 2H25. In terms of financials, PetDag's net profit rose 29.8 per cent to RM293.5 million in 1Q25, up from RM226.04 million a year ago, supported by lower expenditure and higher other income. Both HLIB Research and RHB Research noted that the group's 1Q25 results were within expectations, with an improved bottom line driven by lower operating expenses despite weaker sales volume.
New Straits Times
23-05-2025
- Business
- New Straits Times
Petronas Dagangan's Q1 net profit jumps 29.8pct to RM293.5mil, boosted by lower spending
KUALA LUMPUR: Petronas Dagangan Bhd's (PetDag) net profit rose 29.8 per cent to RM293.5 million in the first quarter ended March 31, 2025 (1Q25) from RM226.04 million a year ago. This was boosted by lower expenditure and higher other income, the company said. However, PetDagang's quarterly revenue declined to RM9.09 billion from RM9.39 billion previously, its filing to Bursa Malaysia showed. Its earnings per share came in higher at 29.50 sen compared to 22.80 sen in 1Q24. The group announced an interim dividend of 20 sen per share (RM198.69 million), up from 18 sen per share last year, to be paid on June 21. Meanwhile, PetDagang recorded a pre-tax profit of RM409.2 million for the quarter, higher against 1Q24 and 4Q24 by 25 per cent and 13 per cent respectively. The higher profitability was mainly driven by lower expenditure across all segments, coupled with marginal improvements on gross profit. This was further supported by favourable price trends for commercial segment. Total volume was slightly lower against both 1Q24 and 4Q24. The group's retail segment recorded lower volume from Mogas and diesel as a result of the shift towards cautious consumer spending during festive period in the quarter under review. However, commercial segment continued to capitalise on the higher demand for Jet A1, softening the overall reduction on total volume. PetDagangan said while the ongoing global uncertainties still remain, the group will continue to monitor potential indirect effects, particularly inflationary pressures towards its supply chain. "Amid this backdrop, the economic environment is expected to be resilient. "This positions the group to sustain its growth, anchored by steady consumer spending and robust investment activity," it added.
