This was despite a slight 13% drop in revenue to RM8.6 billion compared to the same quarter last year and 9% compared to the preceding quarter.

PDB declared a first interim dividend of 16 sen per share, with a payment date of June 20.

“The group continued to show strong performance during the quarter on the back of higher volume sold particularly for Jet A1, Mogas and Diesel following increase in demand from the opening of international borders, festive season and school holidays,” said PDB.

RHB Investment Bank Bhd analyst Sean Lim said the group’s earnings surpassed expectations, coming in at 37% of the consensus estimates for the group’s full year profit.

The positive performance is attributed to stronger numbers from its retail and commercial divisions due to lower operating expenditure and better margins.

“However, we are uncertain if the strong operating margins delivered in Q1 FY2023 are sustainable – given the volatility in product prices,” said Lim.

Nonetheless, Lim has raised earnings forecasts for PDB by 8-9%.

In line with this move, Kenanga Investment Bank Bhd analyst Teh Kian Yeong similarly raised PDB’s earnings forecasts by 27% for FY2023.

However, he pointed out several downside risks to sales volume for PDB.

“This is given the government’s plans to implement targeted fuel subsidies next year. Following this, volumes may suffer a setback in the immediate term,” said Teh.

While Teh believes demand for fuel will be elastic in the long term, there could be a knee-jerk reaction leading to lower consumption post-subsidy removal.

This might be tempered by a revival of Malaysia’s tourism industry in 2023 that could propel the volume of aviation fuel sales.

This is underpinned by projections that international air passenger arrivals in Malaysia will surge to 9.6 million in 2023 (2022: 2.9 million).

Meanwhile, PDB is expected to continue forwarding its sustainability agenda by installing EV chargers at its stations.

At 3.49pm, PDB’s share price has risen 0.27% or 6 sen to RM22.46, giving it a market capitalisation of RM22.31 billion.