PetGas closes FY20 with 3.7% earnings growth


PETRONAS Gas Bhd (PetGas) posted earnings of RM503.35 million in the fourth quarter ended Dec 31, 2020 (4QFY20), a 3.73% year-on-year (YoY) rise from the RM485.27 million net profit it made in the corresponding period a year ago.

PetGas revenue for the quarter under review increased to RM1.39 billion from RM1.37 billion posted a year ago attributed to higher contribution from its regasification and gas transportation segments in line with new tariffs for Regulatory Period 1 (RP1) effective Jan 1, 2020.

Earnings per share for the quarter was 25.44 sen.

In a filing to the stock exchange yesterday, the company noted its gas processing segment’s revenue was slightly lower by 1.2% or RM5 million against the corresponding quarter following lower Internal Gas Consumption incentive due to revision in pricing from regulated price to reference market price.

Its gas transportation segment recorded a revenue of RM17.1 million for the quarter on downward adjustment on Miri Gas Transportation tariff.

PetGas said its liquefied natural gas regasification terminals in Sungai Udang, Melaka, and Pengerang, Johor, sustained strong reliability performances at close to 100% in 4QFY20.

Its utilities segment’s plant had achieved 100% product delivery reliability for steam, electricity and industrial gases during the quarter under review.

Segment revenue decreased by 10.3% or RM36.4 million, mainly attributable to lower excess electricity offtake by customers.

Segment results, nevertheless, improved by 67.7% or RM30 million on the back of higher contribution from steam and industrial gases sales amid lower fuel gas costs and depreciation expense.

The fuel gas costs were lower due to revision in pricing from regulated price to reference market price.

For the full year, PetGas recorded a net profit of RM2.01 billion compared to RM1.94 billion posted in FY19, and an YoY increase of 2.5% in revenue to RM5.59 billion driven by sustained revenue streams and lower costs.

The company declared a fourth interim dividend of 22 sen per ordinary share amounting to RM435.3 million and a special interim dividend of five sen per ordinary share amounting to RM98.9 million, to be paid on March 22, 2021.

Moving forward, the group’s gas transportation and regasification business segments are anticipated to continue contributing positively to earnings under the RP1 tariffs, while its gas processing segment is expected to remain stable on its sustainable income stream under the second term of the 20-year gas processing agreement which was effective from 2019 until 2023.

The utilities segment contribution will continue to be driven by customer demand, which is underpinned by economic conditions, the company noted in its filing.

PetGas stated that the Covid-19 pandemic is not expected to significantly impact the group’s overall earnings.

“The group’s business model and long-term contracts ensure steady revenue streams, particularly for gas processing, gas transportation and regasification business segments,” it said.

Currently for the group’s financial position, its total assets at RM18.3 billion was lower by 6.3% YoY, which is attributable to lower cash and cash equivalents following higher dividends paid.

Its total liabilities decreased by 10.7% on full settlement of term loan and repayment of loan from corporate shareholders of a subsidiary, which was offset by a new Islamic financing raised by a subsidiary during the year.