No bloodbath as MM wish . Both Petron and HY up leh .

Wow! Both Petron and HY up leh! Very surprising.

Pls short it right up to $2.80 , no need go to $1.80. Many will be very thankful to you .

——————————-
Posted by i3lurker > 3 hours ago | Report Abuse

and thats why HY is only worth way below 1.80 ,
since 1.80 is Shell punya disposal price with high profits

MM is just feeling too bitter if others make money from HY. Her life is just too bitter .

By now , all knows who is MM . What she posted has no impact , except they are nuisance only .

Stockraider,
Pls spare a thought to the management, employees and shareholders of HY lah. Don’t label people conman too quickly lah. There wasn’t dividend is largely due to huge capex required to update the plant and to provide huge working capital required for the business.

Petron and HY are both good and have different characteristics.

Similar advice to MM.

@Jerichomy,
You think it is fun when so many JerycomyXXXXX make fxxking fun of your parents and other family members???
Please have a little bit of human dignity to stop all the childish posting and the attacks on your family members will just die down eventually.

Do not ask for what you don’t like !

There may be short term challenges to a large portion of Pchem businesses, but longer term prospects remain very bright . Bear in mind Pchem had very low feedstock cost from Petronas that shall make it surviving tough time . Good time will return.

I think most people trust what you said because it is simple enough to understand. However, many said the opposite is to achieve a purpose and God knows the purpose.
——————-
Posted by probability > 19 minutes ago | Report Abuse

Considering such a tight situation in global refining capacity, with all the above risk potential of further exacerbation.....and long term visibility of Diesel shortage

HY price will shoot up anytime

Its ticking time bomb - trust me on this

I think most people trust what you said because it is simple enough to understand. However, many said the opposite is to achieve a purpose and God knows the purpose.
——————-
Posted by probability > 19 minutes ago | Report Abuse

Considering such a tight situation in global refining capacity, with all the above risk potential of further exacerbation.....and long term visibility of Diesel shortage

HY price will shoot up anytime

Its ticking time bomb - trust me on this

Fuel pricing mechanism in Malaysia.

Price of MOPS + Operation Cost + Profit Margin for Oil Companies + Profit Margin of Petrol Dealers + Alpha = actual cost of petrol at petrol station level .

The government Sales Tax policy and Subsidy finally determine the pump /retail price paid by consumers .

MOPS – Which also stands for Means of Platts Singapore, is a calculation done by a company in Singapore called Platts. They provide different kinds of complex calculations and one of them is the price of refined oil.

A buyer of a finished (refined) oil product will refer to the MOPS index as a better indicator/benchmark of world prices rather than crude oil prices. The MOPS price typically has a premium over the crude oil prices. This is why the Malaysian government uses MOPS to determine fuel prices rather than NYMEX crude oil prices.

Operation Cost – Multiple different costs (including transportation and marketing) which is a pre-set amount by the government at 9.54 cent per litre (Peninsular Malaysia), 8.98 cent per litre (Sabah), and 8.13 cent per litre (Sarawak).

Profit Margin for Oil Companies – This is when the Oil companies make money. Pre-set by the government at 5 cent per litre (petrol) and 2.25 cent per litre (diesel).

Profit Margin for Petrol Dealers – The petrol stations make more money per litre of fuel. Pre-set by the government at 12.19 cent per litre (petrol) and 7 cent per litre (diesel).

Alpha – The difference between the MOPS price and the actual price that is transacted between oil companies and refineries. This is set at 5 cents per litre (petrol) and 4 cent per litre (diesel).

Next comes sales tax and subsidies by the government. According to the Sales Tax Act 1972, the Malaysian government can collect a maximum sales tax of 58.62 cent per litre for petrol and 19.64 cent per litre for diesel. This takes place when the real price of petrol and diesel at the stations are lower than the fixed retail price. Then, the government can either take profit from this or revise the fuel price to be lower to remove the difference in price so that the savings can be for the people.

Apart from that, if the fixed retail price of the fuel is lower than the actual cost of the petrol and diesel at the pumps, the government can pay a subsidy of the same range.

Our pump prices for petrol 95 and diesel are stable because our beloved government pay for the difference between domestic and international price . Look into the pricing mechanism to understand it.
———————-
The government has reiterated that the country’s fuel subsidy bill for 2022 is projected to rise to about RM30 billion, based on global oil prices being what they are at present. In May, that projection for 2022 was placed at RM28 billion, but this was then revised to RM30 billion earlier this month.

Economy minister Datuk Seri Mustapa Mohamed said this would be 170% higher than the RM11 billion spent on fuel subsidies last year. He said that the year-to-date Brent crude oil price currently stands at around US$106 per barrel, a discrepancy of US$40 against the federal Budget 2022’s assumption that the average crude oil price would be priced at US$66 per barrel.

Fuel pricing mechanism in Malaysia.

Price of MOPS + Operation Cost + Profit Margin for Oil Companies + Profit Margin of Petrol Dealers + Alpha = actual cost of petrol at petrol station level .

The government Sales Tax policy and Subsidy finally determine the pump /retail price paid by consumers .

MOPS – Which also stands for Means of Platts Singapore, is a calculation done by a company in Singapore called Platts. They provide different kinds of complex calculations and one of them is the price of refined oil.

A buyer of a finished (refined) oil product will refer to the MOPS index as a better indicator/benchmark of world prices rather than crude oil prices. The MOPS price typically has a premium over the crude oil prices. This is why the Malaysian government uses MOPS to determine fuel prices rather than NYMEX crude oil prices.

Operation Cost – Multiple different costs (including transportation and marketing) which is a pre-set amount by the government at 9.54 cent per litre (Peninsular Malaysia), 8.98 cent per litre (Sabah), and 8.13 cent per litre (Sarawak).

Profit Margin for Oil Companies – This is when the Oil companies make money. Pre-set by the government at 5 cent per litre (petrol) and 2.25 cent per litre (diesel).

Profit Margin for Petrol Dealers – The petrol stations make more money per litre of fuel. Pre-set by the government at 12.19 cent per litre (petrol) and 7 cent per litre (diesel).

Alpha – The difference between the MOPS price and the actual price that is transacted between oil companies and refineries. This is set at 5 cents per litre (petrol) and 4 cent per litre (diesel).

Next comes sales tax and subsidies by the government. According to the Sales Tax Act 1972, the Malaysian government can collect a maximum sales tax of 58.62 cent per litre for petrol and 19.64 cent per litre for diesel. This takes place when the real price of petrol and diesel at the stations are lower than the fixed retail price. Then, the government can either take profit from this or revise the fuel price to be lower to remove the difference in price so that the savings can be for the people.

Apart from that, if the fixed retail price of the fuel is lower than the actual cost of the petrol and diesel at the pumps, the government can pay a subsidy of the same range.

Our pump prices for petrol 95 and diesel are stable because our beloved government pay for the difference between domestic and international price . Look into the pricing mechanism to understand it.
———————-
The government has reiterated that the country’s fuel subsidy bill for 2022 is projected to rise to about RM30 billion, based on global oil prices being what they are at present. In May, that projection for 2022 was placed at RM28 billion, but this was then revised to RM30 billion earlier this month.

Economy minister Datuk Seri Mustapa Mohamed said this would be 170% higher than the RM11 billion spent on fuel subsidies last year. He said that the year-to-date Brent crude oil price currently stands at around US$106 per barrel, a discrepancy of US$40 against the federal Budget 2022’s assumption that the average crude oil price would be priced at US$66 per barrel.

Edible oil price will be going up and stay elevated for many years
————————-
Aug 27): Europe’s fertiliser crunch is deepening with more than two-thirds of production capacity halted by soaring gas costs, threatening farmers and consumers far beyond the region’s borders.

Russia’s squeeze on gas shipments in the wake of Moscow’s invasion of Ukraine is hurting industries across Europe. But fertiliser companies are being especially affected because gas is both a key feedstock and a source of power for the sector.

Wholesale fertiliser prices, which fell back after climbing to multiyear highs following Russia’s assault, are rising again as European Union producers curb capacity. Ammonia prices in Western Europe have surged over the last two years, according to data by Bloomberg’s crop nutrient analysis company Green Markets. Dwindling supplies will keep prices elevated, threatening productivity as farmers are forced to scale back their use of the key nutrient. That in turn will hit consumers as food inflation accelerates.

(Aug 27): Europe’s fertiliser crunch is deepening with more than two-thirds of production capacity halted by soaring gas costs, threatening farmers and consumers far beyond the region’s borders.

Russia’s squeeze on gas shipments in the wake of Moscow’s invasion of Ukraine is hurting industries across Europe. But fertiliser companies are being especially affected because gas is both a key feedstock and a source of power for the sector.

Wholesale fertiliser prices, which fell back after climbing to multiyear highs following Russia’s assault, are rising again as European Union producers curb capacity. Ammonia prices in Western Europe have surged over the last two years, according to data by Bloomberg’s crop nutrient analysis company Green Markets. Dwindling supplies will keep prices elevated, threatening productivity as farmers are forced to scale back their use of the key nutrient. That in turn will hit consumers as food inflation accelerates.
—————————-
That means lower production of edible oil crops too.

This is a piece of good news for Pchem. Pchem owns 3 Urea plants with total capacity over 2 mil mt per year .

https://newswav.com/A2208_QT2cbf?s=A_lfAwhdg

@Sslee and probability,
fully agreed to the concept of hedging - loss in commodity hedges is eventually offset with gain in GP in the same period (the key word is same period). Now, Petron made in advance a loss provision in current period for any anticipated commodity swap loss in future period .

For a simplified illustration ,
In July ‘s account :
Commodity swap loss -$100
GP gain due to lower COS. +$100
Nett impact to earnings is $0.

If I have booked the July commodity swap loss in advance in June , I will gain $100 in GP in July . This is because the commodity swap loss in July is squared off with the provision made in June .

Sorry for the lengthy deliberation on the same topic .

Crack spread for Mogas95 at $14 /bbl is not disastrous. It had been most of the time in the past 10 years lower than this. Crack for diesel and jet fuels are at substantially higher level than the past and shall bring the extra $$$$$$.
No need to panic over softer Mogas92 price .

@probability ,
This sentences appeared under performance review in the latest QR.

Quote :
The sustained hike in prices resulted in strong regional refinery cracks, improving overall margins and lifting operating income to RM362,323 thousand, more than five-fold from last year's RM66,506
thousand. The bullish price outlook as at reporting date, however, required accrual of temporary
mark-to-market loss provision on outstanding commodity hedges, tempering net profit to
RM183,479 thousand, though still surpassing last year's RM42,013
Unquote:

I must bring you to the reason (bullish outlook) for making temporary provision loss on outstanding commodity hedges.
I wonder if the provision is an excuse to temporary ‘hide high profit’ and aim to even out performance for next qtr or next 2 qtrs?

Brent crude was on general uptrend from early April to early June and reached the peak at $121 on 8th June( up from $100 to $121). Thereafter, Brent had been on general downward, bottoming at $91 around mid Aug . It has since rebounded to $100 now. With this crude price development, I wonder is there is any necessity to make provision for hedging loss on outstanding contract which are most likely fixed at prices higher than after 2Q closing?

What’s your take?

@probability.
$166.8 mil is accrued in Q2 as provision for hedging loss , whereas only $109.8 is charged as other expenses in the account. There is a difference of $57 mil ($166.8 - 109.8 mil)
I assume there is provision write back to account for the difference.
Commodity Hedging loss provision made in Q1 was $52+ mil and could have been written back when those commodities contracts provided for didn’t suffer the loss as anticipated in the provision. This could explain the difference.
On the same basis, if the outstanding contract provided in Q2 finally being square off at same or lower crude price, the provision sum $166.8 mil may come in as profit after GP line .

Just for some mind stimulating discussion and masturbating the mind . Hahaha..

That’s what I think too. The provision for hedging loss of $166.8 mil made in Q2 stands good chance for write back as additional profit in Q3 if crude in Q3 is flat or lower . Is my understanding correct?



Posted by probability > 5 minutes ago | Report Abuse

ok thanks John. If thats true, then actual gross profit is 415 + 207 = 622 million MYR

thats very interesting as i firmly believe derivative loss will disappear once the crack and oil price steadies...

The accounting system in Petron and HY is different.
Petron’s GP is Revn less COS. COS include feedstocks and trading refined materials , refining cost and realized hedging gain/loss.

HY’s GP is Revn - Purchases. Purchase is for materials required including feedstock. And refining cost and derivatives are all accounted after GP.

@probability, I think the realized loss is accounted in Cost of sales . The GP is therefore after charging $207.76 mil derivative loss.
The unrealized portion , which is a provision made ,of $166.8 mil is reflected as other expenses after GP line.

@probability, go to note 18 where it mentioned Profit before tax after charging the following:
Derivative realized loss $207.86 mil
Unrealized loss $166.8 mil.

EPS 1H 26.28sen
Forecast FY2022. 48sen.
Prospective PE only 4.6x is ridiculously undervalued.

Is Q2 earning bad ? I don’t think so.

Q2 earnings is affected by about $11 mil charged in fair value change in biological assets which is non cash. , non operating but merely accounting for unharvested crops.
Without considering this , EPS could have been about 14sen instead of 10.75sen.

EPS 2Q. 8.37sen
EPS 1H. 21.08sen
Forecast FY22. 35sen
Base on dividend policy of 60% payout , total dividend FY 2022 shall be 21sen. DY = 9.2%!!
Prospect PE is only 6.5x.

Chicago soybean futures rose past $16 per bushel in late August, the highest in over two months, amid concerns of poor growing conditions in the US and higher import demand from major consumer China. Heatwaves in the American Midwest hampered the supply outlook on the current crop, as weather forecasts still do not favor clear indications of rain for the coming days. In the meantime, record-setting heatwaves for multiple Chinese regions damaged the incoming crop, driving grain traders to enter international soybean markets.

As at 25/8/22, CPO fob Malaysia was usd1,069/mt. SBO ex Rotterdam was usd1,655/mt. CPO is cheaper ridiculously by usd586/mt !
When CPO stock pressure ease in Indonesia soon , the price gap should narrow to usd200/mt with CPO price potentially increase by usd386/mt or RM1,700/mt. This shall bring CPO back to around RM6,000/mt.
SBO price has little chance to go down with weather havoc in Europe, China and U.S.

Don’t write off good plantation stocks yet .

As at 25/8/22, CPO fob Malaysia was usd1,069/mt. SBO ex Rotterdam was usd1,655/mt. CPO was ridiculously cheaper by usd586/mt !
When CPO stock pressure ease in Indonesia soon , the price gap should narrow to usd200/mt with CPO price potentially increase by usd386/mt or RM1,700/mt. This shall bring CPO back to around RM6,000/mt.
SBO price has little chance to go down with weather havoc in Europe, China and U.S.

As at 25/8/22, CPO fob Malaysia usd1,069/mt. SBO ex Rotterdam usd1,655/my. CPO is cheaper by usd586/mt ridiculously! When CPO stock pressure ease in Indonesia soon , the price gap should narrow to usd200/mt with CPO price potentially increase by usd386/mt or RM1,700/mt. This shall bring CPO back to around RM6,000/mt.
SBO price has little chance to go down with weather havoc in Europe, China and U.S.

EPS 1H is 40sen
Forecast EPS FY 2022 70sen.
Prospective PE based on last traded share price of $2.75 is only 3.9x. That’s ridiculously low!!

Chicago soybean futures rose past $16 per bushel in late August, the highest in over two months, amid concerns of poor growing conditions in the US and higher import demand from major consumer China. Heatwaves in the American Midwest hampered the supply outlook on the current crop, as weather forecasts still do not favor clear indications of rain for the coming days. In the meantime, record-setting heatwaves for multiple Chinese regions damaged the incoming crop, driving grain traders to enter international soybean markets.

Chicago soybean futures rose past $16 per bushel in late August, the highest in over two months, amid concerns of poor growing conditions in the US and higher import demand from major consumer China. Heatwaves in the American Midwest hampered the supply outlook on the current crop, as weather forecasts still do not favor clear indications of rain for the coming days. In the meantime, record-setting heatwaves for multiple Chinese regions damaged the incoming crop, driving grain traders to enter international soybean markets.

Chicago soybean futures rose past $16 per bushel in late August, the highest in over two months, amid concerns of poor growing conditions in the US and higher import demand from major consumer China. Heatwaves in the American Midwest hampered the supply outlook on the current crop, as weather forecasts still do not favor clear indications of rain for the coming days. In the meantime, record-setting heatwaves for multiple Chinese regions damaged the incoming crop, driving grain traders to enter international soybean markets.

The earnings and 4sen interim dividend is based on the enlarged share capital after Bonus issue. In this respect, it is a good improvement compared to previous years .
I am think there will be possibly 8 sen final dividend bring total yearly dividend to possibly 12sen . Dividend yield begins to look much better now .

@OTB, no worries. I am not in active trading and therefore the day to day and month to month price movement is of no concern to me . I buy and hold PetronM, HY and many other stocks based on sound fundamentals of the company and business for a foreseeable period . That’s just my investing style and it works for me for years .
I remain convinced of the potential of Petron and HY for a foreseeable period of time until the dynamics of refining business changes.

@probabilty , thanks for coming to my defense. Sadly, we cannot find many in i3 that we can share knowledge, viewpoints and engage in intellectual discussion .

If manner is not important in your life, what difference are you from a dog?

You don’t have to boost your ego here after seeing share price drop. It’s your money and no one cares. I don’t have to tell you what I do with my money .

Learn to be humble , respect diverse viewpoints and show basic manners which you don’t have .



by SuperPanda > 2 hours ago | Report Abuse

we are in the war field, manner is not required but you still didnt get the point

i’ll stop here bcoz petron daily chart dont look nice, i have sold my position this morning

keep on hoping and compare petdag eps vs petron and enjoy your time with red portfolio here.. good luck

Your parents never teach you manners? Make or lose , rich or poor must have manners mah !
———————
Posted by SuperPanda > 43 minutes Posted by SuperPanda > 43 minutes ago | Report Abuse

stock market it not a place to behave, if you want to learn manner, go to school… ago | Report Abuse

stock market it not a place to behave, if you want to learn manner, go to school…

Heatwave and serious draught all over the places is damaging food crops/yield . CPO price shall improve from today's $4,300 to $5,000+ soon . The almost USD600 price gap between CPO and SBO and shortage of fuels in Europe are some of the reasons for CPO price hike as soon as inventory buildup in Indonesia from export ban has eased. Just my view.

2Q EPS is 3.27 sen (2Q dividend of 2.75sen , 84% payout)
1H EPS is 22.70 sen (1H interim dividend is 10.05sen, payout of 44% only)
2H profit from operations only may be 6-7 sen/share.
Bear in mind, the gain from Sarawak estates disposal which is targeted to complete in this financial year can be quite substantial .

Cash generated from operation in 1H is +$251 mil
Cash generated from investing/asset monetisation in 1H is +361 mil
Total cash generated in 1H is a whopping $612 mil.

As such, there is room to pay generous dividend for the next many qtrs . And, its parent company, Bstead holdings and the ultimate parent ,LTAT , are very hungry for more dividends.

Thplant's 2Q and 1H results not so bad lah.
The 2Q results is affected by the negative change in fair value of biological assets ($20.9mil) which follow the commodity price at the closing of the qtr. This can change qtr to qtr very quickly.

Operationally without all this fair value changes of biological assets, the EPS are as below :
EPS 2Q is about 3.3 sen
EPS 1H is about 5.7 sen.
Full year 2022 may be about 10-12 sen

It is encouraging to see that it is resuming paying dividend with 1st interim of 1.5sen. If the company continue to make profit for 2H, i think there will be final dividend too. I forecast 1.5-2.0 sen for final dividend.

Base on the forecasted FY2022 EPS and dividend, there is room for share price to go higher.

EPS 1H $1.07 .
Forecast EPS 2H $1.00 (?)
————————
Forecast EPS FY2022 $2.07 (?)

Realistic ?

Based on the price development in July/Aug for Diesel and jet fuel , coupled with lower crude price , we may see another equally good Q3 and Q4 too.

1. Gasoil/diesel crack spread chart (historical highest level range)
https://www.tradingview.com/symbols/NYMEX-GOC1%21/' target='_blank'>https://www.tradingview.com/symbols/NYMEX-GOC1%21/

2. Gasoline/petrol RON 92 crack spread spread chart (normalize level range)
https://www.tradingview.com/symbols/NYMEX-D1N1%21/' target='_blank'>https://www.tradingview.com/symbols/NYMEX-D1N1%21/

3. Kerosene/ jet fuel crack spread (at historical highest range level)
https://www.tradingview.com/symbols/NYMEX

Hi Sslee, my understanding is different. If the hedging loss is realized in the operating qtr itself , the loss shall be compensated by the higher GP. In this case , the future expected hedging loss is taken in advance and the financial impact will be different. Any reversal of provision made in previous qtr , if not utilized, will directly contribute to additional profit.

May @Probability give his professional view on this .
———————————-

Posted by Sslee > 10 minutes ago | Report Abuse

Johnzhang

“Petron, however, pointed out that its earnings were affected by mark-to-market loss provision on outstanding commodity hedges”

The provision mentioned above is $167 mil. Hopefully a significant portion of the provision will be reversed and add to the profit of Q3.

The provision when realised during maturity date will be offset by realised inventories gain.
So it did not matter whether provision become realised or not.

Q2 2022 delivered the best ever quarterly profit .
—————————-

KUALA LUMPUR (Aug 25): Petron Malaysia Refining & Marketing Bhd’s net profit rocketed to all-time high of RM183.48 million for the second quarter ended June 30, 2022 (2QFY22), more than four times of RM42.01 million achieved a year ago.

Haha…I like your reply .
The answer is on the wall.

Posted by Sslee > 21 seconds ago | Report Abuse

Petronm 2021 EPS is 88.3 cents.
A PE10 is 10 X 0.883= RM 8.83