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Shares in PTT Oil and Retail Business (OR), a subsidiary of Thailand’s national oil and gas giant PTT Group, surged to a two-and-a-half-month high on Wednesday following the company’s first-quarter financial results.
By midday, OR rose to 26.75 baht, up 5.9 per cent from its prior closing. The share price has rebounded to its February’s levels as investors reacted positively to the company’s better-than-expected quarterly earnings.
The gas station operator recorded a net profit of 3.8 billion baht in the first quarter this year, up 63 per cent quarter-on-quarter but down 4 per cent year-on-year. The results beat Bloomberg consensus by 20 per cent.
The strong quarter-on-quarter performance was due to higher oil stock gain and non-oil profit margin, as economic activities recovered after the easing of Covid-19 restrictions, according to the report.
As of March 31, OR runs a total of 2,088 gas stations nationwide, up by 78 stations from a year earlier. It also operates food and beverage outlets as one of the non-oil businesses, namely Café Amazon, Texas Chicken, and 7-eleven convenience stores.
Krungsri Securities’s analyst, Naphat Chantaraserekul, said he expects oil demand to grow in the second quarter due to long holidays, with more foreign tourists after the ease in Thailand’ entry rules from June.
However, the analyst remains cautious on OR’s investments of 4.5 billion baht since 2022, including investments in logistics unicorn Flash Corporation and other restaurants.
“None has contributed significant earnings,” Naphat said. He gave a ‘Sell’ rating on OR at the target price of 22 baht.
This week, the Thai government said the diesel subsidy scheme, which was set to expire on May 20, will likely be extended in order to help Thai people cope with the decade-high inflation rate. Diesel prices in Thailand are currently 32 baht per litre.