MARC Ratings has affirmed its MARC-1IS/AAAIS ratings on PETRONAS Dagangan Berhad’s (PDB) RM10.0 billion nominal value Islamic Commercial Papers/ Islamic Medium-Term Notes (ICP/IMTN) Programmes. The long-term rating outlook is stable.
The affirmation reflects PDB’s well-established track record, leading position in domestic petroleum retailing, robust liquidity, low leverage, and strategic role as the Petroliam Nasional Berhad (AAA/Stable) group’s downstream retail and marketing arm.
PDB operates an extensive nationwide network of over 1,000 petrol stations, a key competitive advantage in the retail segment. The company plans to add about 10 new stations annually to maintain its position as the country’s largest petroleum retailer. In the commercial segment, PDB is firmly established in jet fuel sales, supported by longstanding relationships with major local carriers, and strong supply capabilities that secure recurring contracts.
In 1H2025, group revenue declined 5.5% y-o-y to RM18.2 billion, mainly due to a 4% drop in average selling prices amid lower crude oil prices. Pre-tax profit, however, rose 8.3% to RM783 million on reduced operating expenses, lifting the pre-tax margin to 4.3% (1H2024: 3.8%). This improvement highlights the group’s cost discipline and growth in the higher-margin convenience segment.
On 30 September 2025, the government introduced the BUDI MADANI RON95 (BUDI95) targeted subsidy for RON95, replacing the previous universal subsidy regime. This programme aims to reduce fiscal leakages from non-Malaysian RON95 users. MARC Ratings expects no material impact on PDB’s performance, as most retail customers remain eligible for BUDI95, and demand for RON95 is inelastic.
PDB’s cash flow generation remained strong, with operating cash flows rising to RM2.5 billion in 1H2025, supported by higher profitability. Liquidity was solid, with cash and cash equivalents of RM3.8 billion as of end-June 2025. The group’s balance sheet remained conservatively leveraged, with borrowings of RM200 million and a low debt-to-equity ratio of 0.03x. Given strong operating cash flows and modest annual capex of about RM400 million, borrowings are not expected to increase materially in the near to medium term.