Petronas Gas earnings retreat 13.6% in third quarter

PETALING JAYA: Petronas Gas Bhd’s (PetGas) net profit dipped 13.6% to RM431.58mil in the third quarter ended Sept 30,2019 (3Q19) from RM499.80mil a year ago, dragged down by lower revenue and higher repair and maintenance costs from the utilities segment.

In a filing with Bursa Malaysia yesterday, the group said the drop in net profit was offset by a higher share of profit from a joint-venture company after the commencement of its commercial operations at the air separation unit project at Pengerang in Johor in the first quarter this year.

Revenue, meanwhile, also fell 4.5% to RM1.33bil in the quarter from RM1.40bil in the corresponding period last year due to lower revenue from both the gas transportation and utilities segments.

“Gas transportation revenue was lower in line with the downward revision of tariffs under the incentive-based regulation, whilst utilities revenue was attributed to lower volumes due to the planned statutory turnaround conducted at one of the group’s air separation units in Kertih, ” it added.

PetGas said the revenue drop in both segments was mitigated by a higher gas-processing revenue in line with higher reservation charges under the second term of the 20-year gas processing agreement effective from 2019 until 2023.

The Energy Commission had approved the tariffs for the gas transportation and regasification services for the pilot regulatory period in 2019 from Jan 1 to Dec 31.

However, the group is awaiting approval from the commission for both gas transportation and regasification tariffs under the Regulatory Period 1 effective from 2020 till 2022, which is expected to be announced by year-end.

The company has proposed a third interim dividend of 18 sen per share in 3Q19.

Moving forward, PetGas said the revenue of both the transportation and regasification business segments this year is expected to contribute positively to group earnings due to the tariff revision.

The group added that its gas-processing segment is also likely to deliver improved earnings pursuant to the higher fixed reservation charge under the second term of the gas-processing agreement.

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