PetGas to pay RM1.3b dividend for 2Q

The gas infrastructure and utilities company recorded a net profit of RM547m from RM502m last year


PETRONAS Gas Bhd (PetGas) will be paying a dividend totalling RM1.31 billion for the second quarter ended June 30, 2020 (2Q20), after posting a higher net profit.

The gas infrastructure and utilities company declared a second interim dividend of 16 sen per ordinary share and a special interim dividend of 50 sen per ordinary share.

PetGas recorded a net profit of RM547.1 million in 2Q20, up 8.8% year-on-year (YoY) from RM502.9 million last year, attributable to lower operating costs, higher unrealised foreign-exchange (forex) gain and a higher share of profit from a joint venture, according to an exchange filing on Wednesday.

Revenue climbed 1.4% YoY to RM1.4 billion compared to RM1.38 billion a year ago, mainly contributed by higher revenue from regasification segment in line with new tariffs for Regulatory Period 1 (RP1) effective Jan 1, 2020, offset by lower revenue from the utilities segment as a result of lower electricity sales volume.

During the quarter, PetGas recorded high efficiencies across its four business segments — gas processing, gas transportation, regasification and utilities — which resulted in higher performance incentives and lower costs in the period.

“Our business has proven resilient amid the current market uncertainties. As the Incentive-based Regulation becomes part of the new norm, we expect steady earnings from our regulated businesses for the next three years. Moving on, PetGas looks forward to further improving the utilisation of our facilities and driving cost efficiencies,” MD and CEO Kamal Bahrin Ahmad (picture) said in a statement on Wednesday.

For the first half of the year, net profit dropped 10.1% to RM915.2 million from RM1.02 billion last year largely due to unfavourable forex movement.

Revenue for the six months rose by 1.8% to RM2.8 billion from RM2.75 billion, contributed by the same factors for the revenue in 2Q20 period.

The group has recently disclosed on its website the availability of partial capacity transfer from incumbent shippers to interested shippers and customers at its Regasification Terminal Sungai Udang beginning 2021 until end 2022.

The company said the offer for partial capacity transfer is part of Petroliam Nasional Bhd’s commitment to supporting the third party access system, while the incoming third-party liquefied natural gas cargoes and the consequent traffic increase at Peninsular Gas Utilisation pipeline are envisioned to spur the domestic gas demand from the industries and benefit PetGas.

“We are focused on ensuring activities which were affected by the Movement Control Order to resume pace by the end of the year.

“To date, the group has spent RM434 million on capital expenditure (capex), with the total expected to be around RM1 billion by the end of 2020,” Kamal Bahrin said.

The company said in the Bursa Malaysia filing that the Covid-19 pandemic is not expected to significantly impact the group’s overall earnings as its business model and long-term contracts ensure steady revenue streams, particularly for gas processing, gas transportation and regasification business segments.

The gas transportation and regasification business segment are anticipated to continue contributing positively to the earnings under the RP1 tariffs.

The gas processing segment is expected to remain stable on the back of its strong and sustainable income stream under the second term of the 20-year gas processing agreement effective from 2019 until 2023.

Additionally, PetGas said the utilities segment contribution will be driven by customer demand, underpinned by economic conditions.