KUALA LUMPUR (May 29): PETRONAS Dagangan Bhd (KL:PETDAG) is cutting dividend payout as earnings fell nearly 4% in the first quarter from a steep rise in product costs that offset higher sales.

The company that operates PETRONAS fuel stations will distribute an interim dividend of 18 sen per share to shareholders on June 2, according to an exchange filing on Friday. That compares to the 20 sen per share paid out for the same quarter of 2025.

“Geopolitical tensions in the Middle East remain elevated, with the uncertain trajectory of the conflict reinforcing the need to remain cautious, given the potential disruption to global energy supplies and supply chains,” PETRONAS Dagangan said.

Net profit for three months ended March 31, 2026 (1QFY2026) was RM283 million, or 28.50 sen per share, compared with RM293.5 million in the same quarter a year earlier. Apart from higher product costs, the company also blamed higher expenditure at its commercial segment for the lower profits.

Revenue for the quarter rose 23% year-on-year to RM11.15 billion. The company, which also sells jet fuels and operates convenience stores, noted there was a 15% increase in average selling prices as well as 7% growth in sales volume during the quarter.

“While conditions remain dynamic, we are confident in our ability to navigate challenges across our retail and commercial segments,” PETRONAS Dagangan chief executive officer Azrul Osman Rani said in a separate statement post-results.

Shares of PETRONAS Dagangan rose 2.5% or 44 sen to RM17.78 ahead of the results announcement during the noon trading break. The company’s market capitalisation stood at a little under RM18 billion based on its last price.