KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Earnings Snapshot
Petronas Dagangan Bhd (KL:PETDAG) posted a 3.9% YoY decline in 2QFY2025 net profit to RM265.5 million, as retail weakness overshadowed growth in its commercial and convenience businesses.
Net Profit: RM265.5m (–3.9% YoY)
Revenue: RM9.07b (–7.9% YoY)
Dividend: 22 sen/share (vs. 20 sen last year), bringing 1H25 payout to 42 sen/share (vs. 38 sen last year)
1H25 Results: Net profit +11.3% YoY to RM559m, despite revenue falling 5.6% to RM18.16b
Shares gained 0.5% to RM22.92 by midday Monday, valuing PETDAG at RM22.8 billion. YTD, the stock has risen 18.6%, outperforming the broader Bursa benchmark.
Segmental Performance
Retail: Weaker gross profit, hit by:
Less favourable MOPS (Mean of Platts Singapore) pricing trends.
Softer demand for diesel & Mogas.
Normalisation of travel patterns (boosted in Q1 by festive holidays).
Commercial: Higher profit, supported by stronger Jet A1 fuel demand as air travel normalises.
Convenience Stores: Profit improved on cost efficiency, despite lower merchandise sales.
Operating Expenditure: Lower across all segments, reflecting management’s cost discipline.
Outlook
Management flagged continued market uncertainty but emphasized a proactive strategy:
Cost Vigilance: To cushion margin pressures from volatile oil prices and shifting demand trends.
Commercial Demand: Expected to remain resilient, particularly from aviation and industrial clients.
Retail Recovery: Hinges on fuel consumption trends and consumer confidence.
Investment Implications
Dividend Play: PETDAG continues to reward shareholders with progressively higher dividends, underlining its strong cash position and commitment to returns.
Defensive Qualities: Despite revenue weakness, the group delivered 1H profit growth, supported by segment diversification.
Valuation: Trading at RM22.92, PETDAG’s 18.6% YTD rally suggests investors view it as a resilient consumer-energy proxy, but upside could be capped if retail volumes remain subdued.
Risks: Softer consumer fuel demand, margin volatility from oil price swings, and potential regulatory shifts in fuel subsidies.
Bottom Line
Petronas Dagangan’s 2Q results highlight the resilience of its commercial and convenience segments, even as the retail fuel business comes under pressure. With management focused on cost discipline and maintaining higher dividends, PETDAG remains a defensive dividend-yielding stock. However, sustained growth will depend on how quickly retail demand stabilizes in the second half of FY2025.
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