PETALING JAYA: Petronas Dagangan Bhd’s (PetDag) proposed divestment of its entire stake in Petronas International Marketing (Thailand) (PIMTCL) is not expected to have any impact on its financial performance.

       Although the share price of PetDag may be affected but this would only be in the short term as it effectively utilises its resources after the divestment.

       PetDag recently announced it has agreed to divest its 100% stake in PIMTCL for RM14.2mil. The latter would cease to be a subsidiary upon completion of the divestment.

       MIDF Research, which is maintaining its “neutral” stance on PetDag with an unchanged target price of RM20.31, opined that the divestment would not weaken PetDag’s portfolio performance for the year.

       “Although the announcement of the sales and purchase may have a negative impact on its share price – consequently, its ability to utilise its resources after the divestment – the effect will be short term.

       “The divestment is fair and reasonable and is definitely not unfavourable to its shareholders’ interest.

       “As such, we continue to view PetDag positively for its ongoing mitigation activities, as well as the increasing demand for its products as the pandemic is gradually curbed,” it added.

       PetDag acquired PIMTCL for about RM38.2mil and expects to register a loss of about RM25.7mil from the divestment – which translates to a reduced earnings per share of 2.59 sen.

       However, the divestment has no material impact on the share capital and net assets of PetDag for the current financial year.

       PIMTCL markets and distributes lubricant products in Thailand under Petronas’ brands.

       To date, the total share capital of PIMCTL is about RM25.8mil with 40 million shares. Its latest net profit stood at RM0.8mil.