PetGas 2Q net profit rises on Pengerang LNG terminal

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Petronas Gas Bhd (PetGas) posted higher earnings for the second quarter (2Q) ended June 30, 2018, mainly contributed from its new liquefied natural gas (LNG) regasification terminal in Pengerang, Johor.

Its net profit in 2Q rose almost 20% year-on-year (YoY) to RM509.32 million on the back of higher revenue and lower tax expenses negated by higher finance cost. Revenue grew 15.7% YoY to RM1.36 billion.

“The lower tax expenses were due to the revision of deferred tax estimation reflecting the tax incentives granted to the firm’s LNG regasification terminal in Pengerang, which commenced commercial operations in November 2017,” PetGas noted in its statement to Bursa Malaysia Bhd yesterday.

Its gas processing segment’s gross profit rose 6.3%, or RM10.1 million, in the period supported by lower plant operating expenses, while the segment revenue registered an increase of RM7.7 million, or 2%.

“Gas processing liquid plant extraction performance continued to exceed the targets, contributing towards higher performance-based structure income compared to the corresponding quarter,” it said.

The company’s transportation segment contributed a gross profit of RM265.6 million, 6.3% higher YoY, as revenue rose 5.1% in relations to operations and maintenance revenue from the Sabah and Sarawak gas pipeline.

“Gas transportation segment pipeline network reliability was close to 100%, comparable to the previous corresponding quarter,” it said.

Its utilities segment’s gross profit was lowered 5.4% mainly due to higher utility cost of sale and higher depreciation following the completion of several capital projects.

This came despite the segment’s revenue for the quarter rising 5% to RM308.3 million following the upward revision of fuel gas price on July 1, 2017, and Jan 1, 2018, respectively.

Its regasification segment’s revenue rose by 88% YoY to RM310.6 million due to contribution from the new regasification terminal in Pengerang.

Correspondingly, the segment’s overall performance surged from RM73.4 million to RM177 million.

PetGas noted that it is in continuous discussion with the Energy Commission (EC) to finalise the tariff guidelines for gas transportation and regasification services beyond 2018.

“As announced by the firm on Jan 15, 2018, the Gas Supply (Amendment) Act 2016 is effective from Jan 16, 2018, onwards and the EC has confirmed the current tariffs for the firm’s gas transportation, and regasification services will be maintained until the end of 2018,” it said.

Moving forward, PetGas noted that it expects performance to remain stable on the back of sustainable income streams from the existing gas processing agreement, gas transportation agreements and regasification service agreement signed with its parent, Petroliam Nasional Bhd (Petronas).

“The utilities segment will continue to contribute positively to the group’s results, while the regasification segment results will benefit from the fullyear contribution of the new LNG regasification terminal in Pengerang, Johor,” it said.