Gas Malaysia’s 3Q19 earnings up 12% on higher gas sales


GAS Malaysia Bhd’s net profit increased 12.2% year-on-year (YoY) to RM46.48 million in the third quarter ended Sept 30, 2019 (3Q19), from RM41.42 million the year prior, fuelled by higher volumes of gas sold and lower operating expenditure.

The gas distribution company’s revenue rose 12.8% to RM1.76 billion during the quarter in focus from RM1.56 billion recorded in 3Q18 due to larger sales of gas and higher natural gas tariff, it said in an exchange filing yesterday.

In July, the group announced that the average natural gas tariff after surcharge for the non-power sector in Peninsular Malaysia increased by 5.3% to RM34.66 per million British thermal units (MMBtu) from July 15 to Dec 30 this year.

The revision, following a surcharge of RM1.92/MMBtu, applies to all tariff categories under the gas cost pass-through mechanism. The group’s wholly owned subsidiary, Gas Malaysia Virtual Pipeline Sdn Bhd (GMVP), last month signed a gas purchase agreement with Kulim Green Energy Ventures Sdn Bhd — a joint-venture company between Kulim (M) Bhd (a wholly owned subsidiary of Johor Corp), O’Rec IND Sdn Bhd and MTC Engineering Sdn Bhd.

Through the partnership, GMVP will procure biomethane from Kulim Green Energy for injection into Gas Malaysia’s natural gas distribution system (NGDS) network.

Biomethane is produced from palm oil mill effluent and upgraded to a specification similar to natural gas available in the NGDS network.

Moving forward, the group anticipates that the yearly increase in natural gas sales volume and number of customers will sustain its performance for the financial year ending Dec 31, 2019 (FY19).

“The profitability of the group for FY19 is expected to be in tandem with the level reflecting the prevailing tariff setting mechanism framework,” it said.

Shares of Gas Malaysia closed 0.35% or one sen lower at RM2.82 yesterday, giving the company a market capitalisation of RM3.62 billion.

Gas Malaysia is involved in the distribution and sale of natural gas and liquefied petroleum gas within the NGDS network in Peninsular Malaysia.