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Petronas Dagangan Q2 net profit shrinks on higher opex

KUALA LUMPUR: Petronas Dagangan Bhd’s (PDB) net profit for the second quarter ended June 30, 2019 fell 45.06% to RM172.75 million from RM314.42 million a year ago due to lower gross profit coupled with higher operating expenditure and lower other income.

Its revenue for the quarter increased by 5% to RM7.61 billion from RM7.28 billion. PDB boosted overall sales volume by 8% against the corresponding quarter last year. It declared an interim dividend of 14 sen per share for the quarter.

For the six months period, its net profit dropped 12.94% year-on-year to RM463.95 million from RM532.90 million, while revenue was up 2.40% to RM14.69 million versus RM14.35 million in the previous year.

Managing director and CEO Datuk Seri Syed Zainal Abidin Syed Mohd Tahir said amidst a challenging market environment, it has continued to boost its overall sales volume and this is strong testament to the effectiveness of its business strategies and the quality of its products.

He said mogas volume alone increased by 6% quarter-on-quarter and this reflects the confidence for its new fuel, Petronas Primax 95 with Pro-drive, since launched in January this year.

“Nevertheless, we are cognisant of the impact that the continued volatility of oil price, economic condition and consumers’ sentiment will have on PDB’s overall profitability, and growing our volume will remain our key strategic focus,” he said in a statement.

Syed Zainal anticipated that the market will remain challenging but will continue to push for volume growth through leveraging its newly launched fuel and lubricants, its extensive supply and distribution chain as well as vast network of stations and partners.

“Over and above this, we remain committed to increase profitability by leveraging strategic partnerships to grow our non-fuel offerings. We will continue to increase station throughput by providing seamless and frictionless customer experience through our digital innovation,” Syed Zainal said.


Asians stocks struggle ahead of Powell’s speech; yuan at fresh 11-1/2 yr low

TOKYO: Asian shares struggled to make headway on Friday as uncertainty over how much further the U.S. Federal Reserve would cut interest rates added to investors’ worries over slowing global growth.

With a trade war between the United States and China dragging on, and political tumult in Hong Kong, Italy and Britain adding to the tense backdrop, investors were keenly awaiting Fed Chair Jerome Powell’s speech at a gathering of central bankers in Jackson Hole, Wyoming, later in the day (1400 GMT).

MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.1% higher and was up 0.8% for the week, on track to break a four-week losing streak.

Japan’s benchmark Nikkei added 0.3% and Australian stocks rose 0.3%.

The Shanghai Composite and the blue-chip CSI300 were up 0.5% and 0.7%, respectively, while Hong Kong’s Hang Seng gained 0.5%.

Business surveys on Thursday suggested further slowing in advanced economies in August, but service sector activity remained resilient, offsetting some of the drag from weak manufacturing.

“It’s going to be another wait-and-see day for traders ahead of Powell’s Jackson Hole speech. Investors are hoping for some soothing words from him,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities.

Wall Street stocks were mixed on Thursday, with the S&P 500 closing little changed, while the Dow was up 0.2% and the Nasdaq falling 0.4%.

In the U.S. bond market, the closely watched two-year, 10-year Treasury yield curve briefly moved back into inversion overnight, a shift that also occurred last week and sent financial markets into a tailspin amid worries of a sharp global downturn.

An inversion in the U.S. yield curve has presaged several past U.S. recessions, raising fears the decade-long expansion in the world’s biggest economy might be nearing its end.

While markets overwhelmingly expect the Fed to follow up its first rate cut in a decade with more stimulus at its meeting next month, some policymakers disagree.

Kansas City Fed President Esther George, who dissented against the decision to ease in July, and Philadelphia Fed President Patrick Harker, who said he “reluctantly” supported the cut, both said the U.S. economy does not need more stimulus at this point.

Dallas Fed President Robert Kaplan said the businesses had become much more cautious due to surprises on trade policy and he was “going to at least be open-minded about making some adjustment” if he sees continued weakness.

All of that has made Powell’s speech in Jackson Hole pivotal for markets as they look for any clues on future easing, after the Fed last month cut rates for the first time since the financial crisis.

Any indications of hawkishness in the Fed chief’s comments might hurt riskier assets, though the dollar stands to benefit.

The greenback slipped on Thursday, but moved within narrow ranges. In early Asian trading, the dollar was up 0.1% against a basket of major currencies to 98.293.

The euro also was little changed against U.S. currency at $1.1073. A survey showing a surprise uptick in euro zone business growth for August was offset somewhat by trade war fears knocking future expectations to their weakest in over six years.

The pound jumped to a three-week high of $1.2273 overnight after traders interpreted comments from German Chancellor Angela Merkel to mean that a solution to the Irish border problem could be found before Britain leaves the European Union on Oct. 31.

Merkel on Wednesday challenged Britain to come up with alternatives to the Irish border backstop within 30 days, but French President Emmanuel Macron cautioned there would be no renegotiation of the Brexit deal. Sterling last quoted at $1.2234, 0.1% weaker on the day.

China’s yuan extended losses, threatening to stoke trade tensions between Washington and Beijing.

Spot yuan slid to as low as 7.0992 per dollar, its weakest since March 2008, although the central bank set the midpoint rate at 7.0572, its weakest level in 11-1/2 years, but was much stronger than traders had expected.

Washington labelled China a currency manipulator early this month after a sharp slide in the yuan.

Concern about China’s economy is growing because U.S. tariffs on roughly $150 billion of Chinese goods will take affect from Sept. 1.

Oil prices weakened overnight, with both Brent crude and U.S. West Texas Intermediate down 0.6% each, on worries about the global economy.

Brent crude was last up 0.3% at $60.11 per barrel and WTI crude added 0.2% to $55.46.

Gold prices dipped on Thursday but held near the pivotal level of $1,500 per ounce, underpinned by demand for the precious metal amid uncertainties around monetary policy, trade and geopolitical tensions. Spot gold was last down 0.2% at $1,494.99 an ounce. – Reuters


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Petron’s second quarter earnings at RM56m

PETALING JAYA: Petron Malaysia Refining & Marketing Bhd reported a 39.2% drop in net profit to RM56.22 million for the second quarter ended June 30, 2019 compared with RM92.42 million in the same period of the previous year due to price differentials between the finished products and crude remained narrow.

The group’s revenue slipped 3.3% to RM3.02 billion from RM3.13 billion previously.

For the first six months of the year, Petron’s net profit came in at RM113.74 million, a decline of 30.9% against RM164.55 million recorded in the same period a year ago. This was on the back of a 1.4% decrease in revenue to RM5.77 billion from RM5.85 billion.

According to Petron’s filing with the local bourse, it remains cautious as it sees more uncertainties in oil prices during the year amid re-escalation of the US-China trade war and ongoing geopolitical tensions.

The group said it remains committed to pursuing various strategic programmes to expand its retail network, upgrade its plant and facilities and enhance efficiency in its supply chain.

Petron is set to complete the new Diesel Hydrotreater in its Port Dickson Refinery to comply with the government’s requirement to supply Euro 5 diesel as well as a new import facility with two new product tanks in 2020.


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Oil inches higher after U.S. crude stocks drawdown, economic worries weigh

SINGAPORE: Oil prices edged higher on Thursday after a drawdown in U.S. crude inventories, but lingering concerns over the global economy and a build-up in U.S. refined product stocks kept a lid on gains.

Brent crude futures climbed for a fifth consecutive session on Thursday, rising 6 cents, or 0.1%, to $60.36 a barrel by 0242 GMT on Thursday.

West Texas Intermediate (WTI) crude futures rose 10 cents, or 0.2%, to $55.78 per barrel.

U.S. crude inventories fell more than expected last week as refineries hiked production, but gasoline and distillate stockpiles showed bigger-than-expected builds, the Energy Information Administration said on Wednesday.

Crude inventories fell by 2.7 million barrels in the week to Aug. 16, compared with analysts’ expectations for a drop of 1.9 million barrels. However, gasoline stocks rose by 312,000 barrels and distillate supplies grew by 2.6 million barrels.

“Amid mounting market concerns about a slowdown in economic and oil-demand growth, it might come as a surprise that crude oil inventories have actually been plunging,” analysis firm Kayrros said in a note.

Traders were worried on the prospects of global oil demand especially amid lingering trade tensions between U.S and China, the world’s two major economies.

“If trade uncertainties persist it will be difficult for oil to shrug off concerns about the threat to global demand,” said Stephen Innes, a managing partner at Valour Markets.

U.S. President Donald Trump on Wednesday said he was “the chosen one” to address trade imbalances with China, even as congressional researchers warned that his tariffs would reduce U.S. economic output by 0.3% in 2020.

Asian shares edged ahead on Thursday after Wall Street got a boost from strong retail results, but minutes of the Federal Reserve’s July meeting showed policymakers were deeply divided over whether to cut interest rates as sharply as markets were wagering.

Meanwhile, oil markets were also supported by simmering tensions between the United States and Iran, with Iranian President Hassan Rouhani cautioning Washington against tightening pressure on Tehran.

If Iran’s oil exports are cut to zero, international waterways will not have the same security as before, Rouhani said on Wednesday.

Echoing Rouhani’s tone, Iranian Foreign Minister Mohammad Javad Zarif said Tehran might act “unpredictably” in response to U.S. policies under President Donald Trump. – Reuters