Improved volume helps Gas Malaysia score in Q3

PETALING JAYA: Gas Malaysia Bhd registered a 21.2% year-on-year (y-o-y) rise in net profit to RM50.91mil for the third quarter ended Sept 30,2020.

This was achieved on the back of improved volume of natural gas sold, coupled with better gas contribution margin, which mitigated higher overheads and depreciation being part of cost of sales.

Additionally, the group received higher finance income and lower losses from share of results from joint-venture companies, which were partially offset by higher operating expenses.

This brought Gas Malaysia’s net profit for the first nine months of the financial year ending Dec 31,2020 (FY20) to RM143.39mil, an increase of 8.5% when compared to the same period last year.

In a filing with Bursa Malaysia, Gas Malaysia said its financial performance for FY20 would be affected by the duration and extent of the economic stimulus packages given by the government during the Covid-19 pandemic, in addition to the pace of economic recovery in Malaysia and globally.

“This is despite the fact that the group’s customers are able to fully resume their operations under the recovery movement control order effective June 19.

“The widespread Covid-19 since the beginning of 2020 is a challenging situation facing all industries, some of which are customers of the group.

“The board will continue to exercise caution in managing the group’s businesses for the rest of the financial year, ” it said.

During the quarter in review, Gas Malaysia’s revenue fell 1.9% y-o-y to RM1.72bil, while its nine-month revenue fell 6.5% to RM4.87bil.

As of Sept 30,2020, the group has improved its net cashflow generated from operating activities at RM278.9mil, bringing its total cash and cash equivalents to RM345.27mil.

This is as compared to the nine months ended Sept 30,2019, during which Gas Malaysia had a net cashflow used in operating activities of RM44.33mil, with total cash and cash equivalents of RM128.15mil at the end of the financial period.

Pursuant to the implementation of the Third Party Access (TPA) regime on Jan 1,2020, the government has issued a directive for Gas Malaysia to effect the approval of the average base tariff of RM1.88 per million British Thermal Units for the utilisation of the natural gas distribution system of Gas Malaysia’s wholly-owned subsidiary, Gas Malaysia Distribution Sdn Bhd, under the TPA framework.

The average base tariff will be applicable for the regulatory period beginning Jan 1,2020 to Dec 31,2022.

The government had also provided an undertaking to Gas Malaysia that it will be able to recover the variance between the actual market price and the forecast market price, for variances up to Dec 31,2019.

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