KUALA LUMPUR: Petronas Dagangan Bhd (PBD) has reduced its capital expenditure (capex) this year to RM300 million as compared to RM400 million last year for upgrade and refurbishments existing stations as well as overall business activities.
Managing director and chief executive officer Datuk Mohd Ibrahimnuddin Mohd Yunus said the company would be looking to upgrade up to 15 stations with the refurbishment of over 1,045 Petronas stations nationwide.
"We put more effort especially at our existing stations, re-imaging some of our Mesra store - a new dark-grey coloured concept with different offerings and partnerships. We want to grow both fuel and non-fuel businesses," he said at PDB's 36th annual general meeting, today.
Ibrahimnuddin said PDB has implemented various initiatives to assist dealers running their businesses, amid challenging market.
"Our assistance to dealers include revision of the lower licence fee, provide better sales incentives and dealers' guaranteed margin programme," he added.
Ibrahimnuddin said PDB also revamped its Mesra card loyalty points - three times higher, which would boost sales at Kedai Mesra.
"We work with dealers to provide holistic solutions and create best customers experience," he said.
Ibrahimnuddin stressed that none of Petronas station was closed, as compared to over 300 industry's petrol stations closure since the introduction of the new weekly fuel mechanism.
Ibrahimnuddin said PDB has also secured three commercial business contracts in 2017 for the supply of jet fuel to US-Bangla Airlines, Himalaya Airlines and Air Seoul.
He did not disclose the contracts value, however he hinted the contracts were significant in value.
"These three new secured contracts of maximum tenure of two years have contributed a margin of 0.4 per cent and a volume of 0.3 per cent to overall commercial business performance,” he said.
Ibrahimnuddin said PDB currently commands about 70 per cent of the local market share in aviation jet fuel supply.
"It is more about maintaining the contracts that we secured. We also target new airlines that will come to Malaysia.
"It is based on a tender basis. We are competitive enough to win new airlines. We are the reliable supplier in delivering the fuel to airlines.
"We have to make sure our performance are on time in refuelling the aircraft in accordance to airlines' requirements," he said.
Ibrahimnuddin said PDB's retail and commercial contributed about 90 per cent earnings to the group and the remaining 10 per cent derived from liquified petroleum gas and lubricant last year.
PDB's aviation business contributes over 40 per cent earnings commercial segment and more than 45 per cent derived from automotive fuel.