KUALA LUMPUR: Maybank Investment Research viewed as negative Gas Malaysia Bhd
's recent declaration of a final 2017 dividend of five sen per share, given its expectation of a 100% payout.
"While this payout ratio of 86% is still in accordance with GMB’s dividend policy (minimum 75% payout ratio), GMB has maintained a 100% payout ratio
since listing in 2012m," it said.
The research firm said it believed the payout as an attempt to keep dividends stable given the likelihood of net profit declining in 2018 due to the absence of pipeline contribution.
Maybank Investment Research said Gas Malaysia's 2017 sales volume of 184m mmBTU is a year-on-year growth of 12%, which is substantially stronger than the last guidance due to the strength of the glass sector.
"With the disclosure of segmental revenue and gas sales volume, we estimate GMB’s 2017 spread at MYR1.95/mmBTU, significantly higher than the MYR1.81/mmBTU enjoyed in 2016. Our forecasts presently assume spreads of MYR1.95/mmBTU going forward."
The research firm tweaked its earnings forecasts with an unchanged target price of RM3.
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