Gas Malaysia 2Q earnings slipped on lower gas sales

by SHAZNI ONG/ pic credit:

GAS Malaysia Bhd posted lower second-quarter (2Q) earnings as gross profit fell as a result of lower volume of natural gas sold in the period, as some of its customers were impacted by the Movement Control Order (MCO).

Its earnings fell 9% year-on-year (YoY) to RM44.6 million for the quarter ended June 30, 2020, in part due to higher overheads and depreciation despite higher gas contribution margins.

Earnings were supported by higher finance income and lower share of losses from joint-venture companies.

Revenue for the period fell 11.35% YoY to RM1.54 billion in line with lower volume of natural gas sold and lower average natural gas tariff, Gas Malaysia told Bursa Malaysia in a filing yesterday.

Gas Malaysia said the Covid-19 pandemic has impacted all industries, some of whom are customers of the group.

“The government has announced seven phases of the MCO between March 18 and Aug 31, 2020, in a bid to contain the spread of Covid-19.

“As a result, some of the group’s customers have been operating on reduced capacity, thereby affecting the volume of gas consumed.

“Pursuant to the government’s announcement on June 7, 2020, which eased restrictions under the Recovery MCO, the group’s customers have fully resumed their operations, which in return show the higher consumption of natural gas,” it said in its filing.

The company declared a first interim dividend of 4.25 sen per share payable on Oct 8, 2020.

For the cumulative six months, Gas Malaysia’s net profit rose 2.56% YoY to RM92.49 million.

Revenue, however, slipped 8.88% YoY to RM3.14 billion in line with lower volume of natural gas sold and lower average natural gas tariff.

Gas Malaysia noted that it expects the pandemic to have an impact on its performance for the financial year ending Dec 31, 2020.

Gas Malaysia’s shares closed 2.53% or seven sen lower at RM2.70 yesterday, valuing the gas reticulation company at RM3.47 billion.