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RAISE
THE BAR,
CHANGE THE GAME
PETRONAS Dagangan Berhad
Integrated Report 2023
SCROLL TO CHARGE UP THE EV
HOW WE PERFORMED IN 2023
  • Financial Highlights
    REVENUE
    RM37549.3 million
    DIVIDEND DECLARED
    80 sen
    PROFIT BEFORE TAX
    RM1331.6 million
    DIVIDEND PAYOUT RATIO
    91%
    PROFIT AFTER TAX
    RM966.8 million
  • Core Business Highlights
    Retail-Fuel
    Operationalised 20 new stations
    Consecutive record breaking volume achievement year
    Commercial
    Achieved exceptional growth in Aviation sales volume and margin
    Signed a groundbreaking agreement with the Malaysia Aviation Group and become the first aviation organisation in Malaysia to establish a Sustainable Aviation Fuel offtake arrangement
    LPG
    Maintained overall market leadership in Household and Commercial segments
    Successfully secured more than 40 new Commercial customers
    Lubricants
    Achieved exceptional growth in Aviation sales volume and margin
    Signed a groundbreaking agreement with the Malaysia Aviation Group and become the first aviation organisation in Malaysia to establish a Sustainable Aviation Fuel offtake arrangement
  • Convenience Business Highlights
    SETEL
    Introduced DuitNow facility, giving access to more than 1.6 million stores nationwide
    Fostered greater accessibility for broader segment of users by becoming an appointed e-Wallet service provider for eBeliaRahmah and eMADANI
    Soft launched PRYSM as an in-house Active Lifestyle brand
    MESRA
    97 Café Mesra outlets in operation
    Grew Café Mesra label products utilising sustainable packing and packaging
    Expanded Mesra label offerings to more than 120 SKUs
    Opened 20 new Complementary Business outlets from existing and newly introduced partners, including local brands
  • Sustainability Highlights
    68 sites solarised in collaboration with Gentari and strategic partners as of 2023
    Signed collaboration agreement with Gentari Green Mobility, with 25 new EV charge points installed
    Recruited 10 PWD into our ecosystem
    Improved score of 3.6 for FTSE4Good assessment
    Renewed MARA MoU with additional scope to provide continued placement for MARA-sponsored talents and sustainability development advisory for entrepreneurs
    Launched 33 collection points for Used Cooking Oil, collecting 133.7 tonnes nationwide
LEADERSHIP MESSAGES
  • Chairman’s Statement
    Raising the Bar: Our Commitment to Excellence
    As we reflect on the past year, PETRONAS Dagangan Berhad’s (PDB) journey has been one defined by its pursuit of excellence. It is with a sense of pride that I share our journey of resilience, innovation and steadfast progress towards our goals for the year. A clear theme resonated throughout all our endeavours for the year under review.
    DATUK ANUAR AHMAD
    Chairman
    chairman
    chairman
    In recognition of the successful year and with a commitment to enhancing shareholder value, the Board is pleased to announce:
    80 sen
    DIVIDEND DECLARED
    91%
    DIVIDEND PAYOUT RATIO
    Chairman’s Statement
  • MD/CEO’s Statement
    Dear Shareholders,
    I am pleased to report that 2023 was both a remarkable and transformative year for us. It was a year where we not only surpassed records but also demonstrated our capability to weather challenging market conditions, addressing obstacles and ending on a high note. Our pursuit of the Moving Forward Together (MFT) strategy has been instrumental in this success.
    AZRUL OSMAN RANI
    Managing Director/Chief Executive Officer
    ceo
    bg
    The MFT is anchored on three fundamental pillars to steer business growth and is underpinned by rigorous Environmental, Economic, Social and Governance (EESG) principles.
    Value
    Enhancing Core Strengths and Sustaining Market Leadership
    Growth
    Diversifying with Convenience for Sustainable Growth
    Sustainability
    Building a Responsible Future
    MD/CEO’s Statement
  • CFO’s Review
    Dear Shareholders,
    For the year under review, we achieved commendable revenue growth and strong financial performance by strategically positioning PETRONAS Dagangan Berhad (PDB) to capitalise on market demand opportunities and generate value through our business segments. The Group recorded Profit Before Taxation (PBT) of RM1,331.6 million, an increase of 17% against 2022.
    FARZLINA AHMAD MURAD
    Chief Financial Officer
    ceo
    bg
    Financial Performance
    RM37549.3 million
    REVENUE
    RM1331.6 million
    PROFIT BEFORE TAX
    RM11487.0 million
    TOTAL ASSETS
    RM1663.6 million
    EBITDA
    CFO’s Review
VALUE CREATION AT PDB
Capital Input
Our Value Creating Activities
Outputs
Outcomes
Click for more details
BUSINESS REVIEW
Retail
Commercial
LPG
Lubricants
Mesra
Setel
Supply and Distribution
Digital
  • Retail-Fuel
    Retail
    In 2023, we significantly raised the bar for Retail-Fuel, marking a stellar year with volume reaching new heights, setting a record-breaking achievement.
  • Commercial
    Commercial
    Our strategic focus in capitalising on the growing demand in highvalue segments, specifically in the Aviation and Upstream sectors, has delivered strong returns.
  • LPG
    Lpg
    We maintained our leadership position as the premier retailer and marketer of LPG products, and consistently remain as a preferred choice among customers.
  • Lubricants
    Lubricants
    The Lubricant Business achieved strong performance in 2023, surpassing industry benchmark.
  • Convenience: MESRA
    Mesra
    In 2023, Mesra Retail & Cafe Sdn. Bhd. (MESRA) not only achieved, but significantly raised the bar in its performance across its three core business segments of Convenience Stores, Complementary Business and Food & Beverage (F&B).
  • Convenience: Setel
    Setel
    As we continue to innovate to raise the bar in ensuring every Setel interaction offers convenience and supports sustainability, we also actively explore new avenues to increase and strengthen revenue streams to create value for PETRONAS Dagangan and its stakeholders.
  • Enablers: Supply and Distribution
    Setel
    Amidst the ongoing surge in order fulfillment nationwide, Supply and Distribution Division (SDD) has adeptly sustained daily operations by employing resilient strategies at pace.
  • Enablers: Digital
    Digital
    At PETRONAS Dagangan, we are committed to using digital technologies to enhance the customer experiences and make everyday life simpler and better.
SUSTAINABILITY DASHBOARD
In 2023, PDB advanced its sustainability agenda through various key achievements in its six prioritised material matters. We will continue to identify opportunities and mitigate risks of our material matters to create sustainable value.
  • 01
    Economic Growth and Performance
    Highlights:
    • Directly and indirectly supporting the employment of more than 13,000 individuals
    • Local suppliers accounted for about 98% of our procurement budget
    UN SDGs:
  • 02
    Climate Change and GHG Emissions
    Highlights:
    • Solarised 68 sites with strategic partners as of 2023
    • Signed offtake agreement with Malaysia Aviation Group for the supply of Sustainable Aviation Fuel from 2027 until 2035
    UN SDGs:
  • 03
    Sustainable and Ethical Supply Chain
    Highlights:
    • Social Risk Assessment (SRA) being incorporated into PETRONAS Dagangan’s core business process
    • Developed Environmental and Social Impact Assessment (ESIA) that sets out the environmental and social requirements for the planning of development projects in PETRONAS Dagangan
    UN SDGs:
  • 04
    Human Capital
    Highlights:
    • Engaged over 1,000 suppliers on labour- related laws in collaboration with Department of Labour Peninsular Malaysia (JTKSM)
    • Implemented the D&I Inclusion Framework to raise awareness of inclusivity, covering Persons with Disabilities (PWD), young leaders and women’s empowerment
    UN SDGs:
  • 05
    Community Investment
    Highlights:
    • Invested RM1.4 million which impacted over 100,000 individuals through our various community-related initiatives
    • Over 300 employees delivered more than 1,000 volunteering hours via multiple internal and external programme
    UN SDGs:
  • 06
    Ethics and Corporate Governance
    Highlights:
    • Sustainability-related matters are discussed regularly at the Board and management level via the Board Sustainability and Risk Committee (BSRC) and Sustainability Action Council (SAC)
    UN SDGs:
  • Capital Input
    Financial
    Pool of funds that enable us to carry out our business, including our shareholders’ equity and income from operations.
    Manufactured
    Our network of PETRONAS stations, Kedai Mesra, Café Mesra, terminals and bottling facilities, PETRONAS AutoExpert outlets, as well as our fleet of vehicles
    Intellectual
    Our brand and franchise value, research and development capabilities, innovation capacity, reputation as well as strategic partnerships
    Human
    The collective knowledge, skills and experience of our employees and Board of Directors
    Social and Relationship
    The strong relationships which we have developed with all the stakeholders who have contributed towards our 40-year success story
    Natural
    The electricity, fuel, water and other natural resources required to deliver our products and services to customers
  • Our Value Creating Activities
    Strategic Pillars
    Value
    Growth
    Sustainability
    Material Matters
    Economic Growth and Performance
    Climate Change and GHG Emissions
    Human Capital
    Customer-Centricity
    Environmental Management
    Capability Building
    Ethics and Corporate Governance
    Sustainable and Ethical Supply Chain
    Community Investments
    Data Privacy and Security
    Health and Well-being
    Our Risks
    HSE Risk
    Strategy Risk
    Technology and Cybersecurity Risk
    Legal and Regulatory Risk
    Operation Risk
    Financial Risk
    Market Risk
    Sustainability Risk
    Talent Risk
  • Outputs
    Revenue: RM37,549.3 million
    Profit After Tax: RM966.8 million
    Dividend per share: RM37,549.3 million
    Dividend payout ratio: 91%
    >1,000 PETRONAS stations
    >800 Kedai Mesra
    97 Café Mesra
    80 AutoExpert outlets
    MoU with Gamuda Land aimed at providing greater convenience
    Established a Sustainable Aviation Fuel offtake arrangement with Malaysia Aviation Group
    Soft-launched PRYSM as an in-house Active Lifestyle brand
    >120 Mesra label SKUs in food and non-food categories
    RM474.8 million salaries paid to employees
    Zero fatality rate in 2023
    Enrolled 63 fresh graduates under Graduate Employability Enhancement Scheme (GEES)
    RM497.0 million taxes paid to the government
    RM47,666.6 million paid to contractors/business partners/suppliers
    Provided structured internships to 129 students from 30 universities in 2023
    8 social impact programmes
    Improved score of 3.6 for FTSE4Good assessment
    840.6 tCO2e GHG emissions avoided from use of solar energy
    Collected 133.7 tonnes from Used Cooking Oil (UCO) initiative
    79.7m3 rainwater harvested for non-potable uses
  • Outcomes
    Consistently surpass 50% dividend payout policy in delivering value to shareholders
    Deliver robust revenue and profitability
    Expand footprint to provide access and comprehensive retail and service network
    Offer range of Fuel and Non-Fuel services towards serving as fuel forecourt lifestyle destinations
    Innovate customer experience through digital and lifestyle integration
    Advance green energy solutions
    Lead employee development and diversity
    Contribute meaningfully to Socio-economic growth and Community well-being
    Foster a sustainable business ecosystem and strengthen local value chain
    Expand EV charging infrastructure
    Invest strategically in renewable energy
    Reduce GHG emissions
Retail-Fuel
In 2023, we significantly raised the bar for Retail-Fuel, marking a stellar year with volume reaching new heights, setting a record-breaking achievement.
Who We Are and What We Do
Our Retail-Fuel Business offers an array of fuel products and services to consumers through a network of more than 1,000 PETRONAS stations across Malaysia.
Our range of fuel products includes premium options developed in partnership with the Mercedes-AMG PETRONAS Formula OneTM team. These include:
  • - PETRONAS Primax 95 with Pro-Drive
  • - PETRONAS Primax 97 with Pro-Race
  • - PETRONAS Dynamic Diesel Euro 5 with Pro-Drive (B7)e
  • - PETRONAS Dynamic Diesel Euro 5 with Pro-Drive (B10)
  • - PETRONAS Dynamic Diesel Euro 5 with Pro-Drive (B20).
All PETRONAS stations are operated by Rakan Niaga, who are appointed through a stringent selection process and provided with continuous training.
Value Created by Business Segment
01
Quality
World-class quality fuel solutions for our customers
02
Innovate
Seamless and frictionless experience to customers by leveraging digital technology
03
Customer Experience
Superior look and feel and the most desirable customer experience
04
Capability
Cultivate capabilities of our people and workforce, Rakan Niaga and Krew PETRONAS
Key Focus Areas
Operational Excellence
Continuous improvement across the business
Empowering Beliefs and Behaviours
Cultivating towards success and growth for its people
Volume-Focused and Customer Experience
Scaling up the business with differentiated experience
Growth and Resiliency
Driving value while future- proofing the business
Commercial
Our strategic focus in capitalising on the growing demand in highvalue segments, specifically in the Aviation and Upstream sectors, has delivered strong returns.
Who We Are and What We Do
Commercial Business drives the sales and marketing of bulk fuel products to B2B customers across diverse economic sectors, including Aviation, Mining and Quarrying, Agriculture, Bunker, Manufacturing, Construction, and Services. Our products include Aviation Fuels, Diesel, Fuel Oil, Petroleum Coke, Bitumen, Sulphur, Mogas, Kerosene, Methanol, LNG, SmartPay and ROVR services.
We remain committed to delivering exceptional value to our customers. By understanding their needs and leveraging our extensive nationwide distribution network, including fuel storage terminals, road tankers and a broad line-up of channel partners, we ensure reliable service even in uncertain times. This network includes fuel storage terminals, road tankers and a broad line-up of channel partners.
Value Created by Business Segment
01
Strategic Partnership
Strengthening existing partnerships whilst developing new ones in growing and unlocking future value
02
Quality
Position Commercial Business as a leading fuel solution partner by providing superior products and services in addressing customer pain points and delivering value
03
Cultivate
Build capabilities of our business partners through mutually beneficial collaborations and knowledge-sharing
04
Digitalisation
Leverage digitalisation in the business towards driving better cross-functional collaboration and tracking of key KPIs in making informed decisions
05
Business Sustainability
Support the net zero carbon emissions aspiration by continuously providing cleaner energy solutions in the B2B segments
Key Focus Areas
Expanding Market Share
Drive growth in chosen high-value segments
Providing Cleaner Fuel Alternatives
Collaboration with customers and partners towards cleaner energy solutions
Enhancing Efficiency
Strengthening commercial propositions and operational excellence
LPG
We maintained our leadership position as the premier retailer and marketer of LPG products, and consistently remain as a preferred choice among customers.
Who We Are and What We Do
Our LPG Business is the leader in the domestic market and caters to the Household, Commercial and Industrial segments. In the Household segment, we offer subsidised 12kg and 14kg cylinders that are primarily used for domestic consumption. For Commercial customers, we offer nonsubsidised 14kg and 50kg cylinders. Our industrial clients benefit from the convenience of bulk LPG, which requires storage tanks at their premises, ranging from 200kg to 32,000kg in size.
We have developed an extensive LPG supply and distribution network that includes six terminals and bottling facilities. Our network comprises more than 290 channel partners nationwide, consisting of Premier Dealers, Dealers and Bulk Dealers, all dedicated to deliver our quality products to consumers.
Value Created by Business Segment
01
Availability
Ensure a seamless and consistent supply of products, amidst the uncertainties and challenging business environment, all while upholding and preserving the inherent value of our offerings
02
Accessibility
Elevate and strengthen our network of channel partners to seamlessly deliver our products nationwide
Key Focus Areas
Consolidating Our Position
Strengthen market leadership in the Household segment
Broadening Our Footprint
Expand our presence in the Commercial segment
Strengthen Process and Productivity
Drive operational efficiencies
Lubricants
The Lubricant Business achieved strong performance in 2023, surpassing industry benchmark.
Who We Are and What We Do
Lubricant Business is responsible for the sales, marketing, distribution and technical services related to PETRONAS Lubricant products across Malaysia. Our portfolio encompasses Passenger Car Motor Oils, Motorcycle Oils, Commercial Vehicle Lubricants, as well as Industrial and Marine Lubricants which cater for consumers, commercial and industrial consumption. We leverage technology to enhance our propositions for these market segments, focusing on delivering and creating value for our customers.
Value Created by Business Segment
01
Quality
Develop world-class products through advanced R&D technology for top performance and fuel efficiency
02
Create
Generate sustainable margins for all business partners along our value chain
03
Capability
Prioritise upskilling our people, dealer, workshop and key customers on product and technical knowledge
04
Business Synergy
Offer winning propositions that enable our partners to grow with us
05
Network
Foster long-term partnerships with diverse stakeholders and capitalise on crossselling opportunities via PETRONAS Dagangan’s various business segments
06
Environment
Ongoing collaboration with strategic partner in promoting sustainability within the ecosystem’s circular framework
Key Focus Areas
Build Power Brands
  • Strengthen Power Brands comprising PETRONAS Syntium, PETRONAS Sprinta and PETRONAS Urania to drive consumer trials leading to loyalty
Broadening Our Footprint
  • Increase mass market presence by enhancing our Trade Value Proposition and expanding our network via new Direct channel
  • Expand PETRONAS AutoExpert network and enhance its efficiency with Workshop Management System
  • Attract new OEM customers to drive growth
Value Generation
  • Enhance profitability by strategically upselling and crossselling, and through disciplined revenue management
Commercial Excellence
  • Attain commercial excellence through effective category management, optimise market distribution and improve salesforce efficiency
Convenience: MESRA
In 2023, Mesra Retail & Cafe Sdn. Bhd. (MESRA) not only achieved, but significantly raised the bar in its performance across its three core business segments of Convenience Stores, Complementary Business and Food & Beverage (F&B).
Who We Are and What We Do
We provide a range of consumer products and services at over 800 Kedai Mesra nationwide and collaborate with more than 50 strategic partners to increase customer visits to PETRONAS stations. Our expansion efforts included expanding Café Mesra’s presence beyond the petrol station forecourt and throughout Peninsular Malaysia with a footprint of 97 outlets, and participating in various events to strengthen the brand, customer experience and satisfaction.
Value Created by Business Segment
01
Quality
Excellent quality products, including Readyto-Eat, Ready-to-Drink and coffee-based beverages for our Customers at both Kedai Mesra and Café Mesra
02
Convenience
One-stop solution for our customers, providing them easy access to meet their daily needs and more, making their lives simpler and better every day
03
Value
Offering immense value pricing with attractive promotional mechanics in a bright, modern retail environment
Key Focus Areas
Mesra Convenience Store
Offers convenience, products and services to PETRONAS station customers through Kedai Mesra, featuring Mesra label branded items, with an emphasis on maximising value for our customers and our Company
Mesra Complementary Business
Partnerships with Quick Service Restaurants (QSR), indoor and outdoor F&B partners, which include international and local brands, and offer services such as payment terminals, bank service machines and self-service kiosks
Mesra Food & Beverage
In its second year of operations, Café Mesra’s focus is to continue expanding its presence across Peninsular Malaysia, strengthening the brand and exploring new F&B verticals as part of our growth strategy
Convenience: Setel
As we continue to innovate to raise the bar in ensuring every Setel interaction offers convenience and supports sustainability, we also actively explore new avenues to increase and strengthen revenue streams to create value for PETRONAS Dagangan and its stakeholders.
Who We Are and What We Do
We innovate and expand new business ideas to diversify revenue streams. Setel focuses on addressing customer needs and delivers a seamless experience across a range of services. Leveraging PETRONAS Dagangan’s wide distribution network and brand strength, Setel contributes significantly to the growth of new markets.
Providing motor-related convenience housed in one mobile app, Setel offers various services such as fuelling, parking, EV charging, insurance, road tax renewal and 24/7 roadside assistance.
Setel also features PETRONAS Shop, an online shop showcasing its commitment to developing new revenue channels and providing an integrated service experience.
Value Created by Business Segment
01
Encourage business growth through creative strategies in corporate entrepreneurship and innovation
02
Expand product and service offerings beyond fuel to attract new customers
03
Create inventive solutions for customers to meet their needs and offer a smooth customer experience journey
Key Focus Areas
Accelerate Business Growth
Scale up our business for growth with continuous iteration of use case and products
Grow Clientele and Enhance Customer Experience
Expand our customer base by improving the customer journey through continuous innovation and the curation of new solutions that address their needs
Enablers: Supply and Distribution
Amidst the ongoing surge in order fulfillment nationwide, Supply and Distribution Division (SDD) has adeptly sustained daily operations by employing resilient strategies at pace.
Who We Are and What We Do
SDD oversees the comprehensive management of the end-to-end supply network, spanning from refineries through primary and secondary distribution channels to the end users, ensuring safety at every step. This responsibility encompasses various aspects such as product sourcing, distribution, infrastructure planning, terminal operations, asset management, and product delivery.
Extending across 36 terminals in Malaysia, SDD’s expansive supply and distribution network ensures uninterrupted and dependable product supply and is optimised for efficient cost-to-serve.
SDD cultivates a dynamic HSE culture, strives for operational excellence, drives sustainability initiatives and always maintains unwavering regulatory compliance.
Value Created by Business Segment
01
Reliable
Safe and reliable operations that consistently exceed customer expectations in volume growth
02
Optimisation
Structured approach to cost management, maximising profitability through efficient processes and cost optimisation efforts
03
Competencies
Nurture high competencies and instill a conducive work environment for both staff and contractors
04
Innovate
Embrace digital solutions to enhance and create additional value in the customer experience
Key Focus Areas
Maximising Value Through Cost Optimisation
SDD persistently enhance our services by diligently optimising costs and positioning ourselves as a solutions provider with a robust network that consistently meets and exceeds our customers’ expectations.
Safety and Service Excellence
Our ongoing emphasis remains on order fulfillment, ensuring a reliable supply, enhancing customer satisfaction, upholding HSE assurance and achieving operational excellence. These efforts collectively contribute to our competitive advantage, ultimately striving to make people’s life simpler and better.
Enablers: Supply and Distribution
At PETRONAS Dagangan, we are committed to using digital technologies to enhance the customer experiences and make everyday life simpler and better.
Who We Are and What We Do
Digital supports and amplifies the digital capability of all areas of PETRONAS Dagangan’s business and operations to elevate customer experiences, efficiency, resilience and sustainability efforts.
Benefitting from the significantly enhanced digital infrastructure delivered from our digital blueprint, we are now focused on supporting PETRONAS Dagangan’s efforts to achieve record sales volumes by maximising new usage and performance out of PETRONAS Dagangan’s extensive digital platforms. Cybersecurity is a key consideration throughout this process, as the protection of sensitive data and systems is vital to improve our business resilience.
Value Created by Business Segment
01
Customer experience and Revenue uplift
By using programmable touch, video and sound enabled technologies at our main customer touchpoints on their phones, fuel dispenser and in-store at the point of sale. We create digitised intuitive user experiences for payments, loyalty and marketing to our customers that uplifts customer live time value and sales volumes
02
Managing cost to serve
By using data analytics, low-code platforms, cloud computing and commoditised off the shelf infrastructure, we automate manual tasks, reducing errors, and optimise workflows. This results in increased efficiency, improved productivity, and reduced costs
03
Minimise Risk
Through technologies such as cloud computing and cybersecurity to protect data and systems from unauthorised access, loss and damage. This results in increased reliability, security, and compliance
Key Focus Areas
Digitisation of Physical Experiences
Building on the success of our Setel app, we introduced cardless Mesra loyalty and Setel Lite in 2023, offering convenient interim steps for customers to experience our digital loyalty and payment options before transitioning to the full Setel app features.
On the B2B side, we digitally integrated our sales teams across business lines, enhancing collaboration, upselling, cross-selling and providing an integrated CRM view.
Cybersecurity
Cyber risks are recurringly rated among the highest concern for businesses globally. At PETRONAS Dagangan we have continued to advance our cybersecurity posture to meet evolving industry standards, improve from our past experiences and continued education of our employees in cyber safe behaviors.
Operational Excellence
We have continuously enhanced operations through modernisation of tools, processes and governance to sustain availability of PETRONAS Dagangan’s digital assets deployed at over 1,000 locations nationwide to transact record sales volumes annually and during peak demand periods.
We also continued pass Company-wide productivity improvement efforts through digitalisation of processes and analytics though provision of self-service platforms to empower a community of citizen analysts and citizen developers at PETRONAS Dagangan.
Embedding Sustainability
We have also made steps in our digital readiness to support PETRONAS Dagangan’s emissions reporting obligations in line with Bursa Malaysia’s requirements for sustainability disclosure. Initial solutions to support the production and maintenance of trackable and traceable data, for transparency of reporting have been put in place