PetGas’ 3Q net profit slips on forex loss

by ANIS HAZIM / pic credit:

PETRONAS Gas Bhd (PetGas)’s net profit in the third quarter ended Sept 30, 2021 (3Q21), fell to RM580.84 million from RM591 million in 3Q20, due to the impact of unfavourable foreign exchange (forex) movement.

Revenue on the other hand rose marginally to RM1.43 billion on higher revenue from its utilities and regasification segments in line with higher sales volumes and new revenue stream from liquified natural gas ancillary services.

In a filing to the local bourse yesterday, PetGas recorded an unrealised forex loss of RM10.4 million relating to the translation of US dollar-denominated assets and liabilities during the quarter.

This was in contrast with a gain of RM94.3 million registered in the corresponding quarter.

PetGas’s earnings per share for the period also fell to 29.35 sen from 29.78 sen in 3Q20.

Its gross profit improved by 7.7% or RM56.9 million with higher contribution from the regasification segment due to lower operating costs, mainly relating to internal gas consumption and utilities.

The company declared a third interim dividend of 18 sen per share, payable on Dec 20, 2021.

For the cumulative nine months (9M21), its net profit increased to RM1.54 billion from RM1.51 billion in 9M20, but revenue fell to RM4.15 billion from RM4.2 billion in 9M20.

PetGas expects its performance in 2021 to remain resilient despite the ongoing Covid-19 pandemic.

“The group’s business model and longterm contracts ensure steady revenue streams, particularly for gas processing, gas transportation and regasification business segments,” PetGas stated in its filing yesterday.

Its gas transportation and regasification business segments are anticipated to continue contributing positively to the group’s earnings under Regulatory Period 1 tariffs.

The company expects its gas processing segment 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.

“The group’s utilities segment contribution will be driven by customer demand, underpinned by economic conditions,” it added.

AmInvestment Bank Bhd has maintained a ‘Buy’ call on PetGas with a low sum-of-parts-based fair value of RM20.20 (from an earlier RM20.35 per share), which reflects a premium of 3% from our environmental, social and governance rating of four stars.

PetGas’s share price closed unchanged at RM16.40 yesterday, giving it market capitalisation of RM32.45 billion.