KUALA LUMPUR (Nov 21): Oil company Petron Malaysia Refining & Marketing Bhd (KL:PETRONM) suffered a 94.3% drop in its third-quarter net profit, on lower sales volume due to a correction in domestic fuel demand following the implementation of the retail diesel targeted subsidy in June this year.

The downward trend in oil prices during the third quarter under review also dragged the group's net profit down to RM4.63 million in the three months ended Sept 30, 2024 (3QFY2024) from RM81.9 million a year earlier.

This resulted in a lower earnings per share of 1.72 sen for 3QFY2024 compared with 30.33 sen for 3QFY2023.

Quarterly revenue also fell 21.4% to RM3.81 billion from RM4.85 billion in 3QFY2023. Petron did not declare any dividends for 3QFY2024.

In a filing with Bursa Malaysia on Thursday, Petron said it recorded total sales volume of 9.2 million barrels in 3QFY2024, down 7% year-on-year from 9.9 million barrels. Export sales also slid, resulting from reduced refinery production. Meanwhile, commercial volume grew 9%, mainly driven by jet fuel sales and Gasul LPG.

It also noted that the price of benchmark Dated Brent crude fell sharply by 18% from a peak of US$90 (RM401.78) per barrel in April to US$74 per barrel by the end of 3QFY2024. It attributed the decline to concerns on China’s slowing economic growth and Saudi Aramco’s announcement of its plan to increase production to regain market share.

"The bearish crude oil market was aggravated by the continued contraction in regional refining cracks," said Petron.

For the cumulative nine-month period (9MFY2024), Petron's net profit fell 62% to RM87.59 million from RM230.64 million a year earlier, while revenue was flat at RM12.76 billion against RM12.72 billion in 9MFY2023.

On prospects, Petron expects oil price volatility to persist considering heightened market sentiments on the slowdown in China’s economy, US interest rate cuts, ongoing geopolitical tensions in the Middle East, and Saudi Arabia’s plan to increase production to regain market share. "The result of the US presidential election is also expected to impact both global oil and currency markets," it added.

On the local front, the group said private consumption may face headwinds from the planned rollout of gasoline targeted subsidy in 2025.

Petron’s share price closed up three sen or 0.71% at RM4.23 on Thursday, giving the group a market capitalisation of RM1.14 billion. The stock has fallen 6% so far this year.