Affin Hwang Research anticipates the group to report lower core net profit of RM391mil for 2025.
PETALING JAYA: Affin Hwang Investment Bank Research projects Gas Malaysia Bhd
’s 2025 earnings to decline by 11% on lower gas prices and compression in gas shipping margins, but notes that its earnings outlook is largely intact.
“We anticipate the group to report lower core net profit of RM391mil for 2025 due to lower profit margin from Gas Malaysia Energy and Services under the new gas shipping agreements and declining natural gas selling prices, tracking weaker global crude oil prices and the strengthening of ringgit to US dollar,” it said.
The research house said the lower natural gas prices are tracking weaker global crude oil prices as the global oil market is likely to enter an oversupply phase this year and next, assuming no major disruptions to oil supply.
It explained that lower oil prices will be driven by the Organisation of the Petroleum Exporting Countries and allies acceleration in unwinding its voluntary supply cut program, coupled with slowing demand growth from China.
“Global demand growth will continue to be led by Asia Pacific, particularly India, while demand in other regions is expected to remain relatively flat,” Affin Hwang Research added. It forecasts 2025 and 2026 Brent crude oil prices to be at US$70 per barrel and US$65 per barrel, respectively, implying a 13% and 19% decline from 2024 average Brent crude price of US$80 per barrel.
However, it believes higher natural gas sales volume, driven by market share gains, should help cushion the impact.
That said, the research house likes Gas Malaysia’s prospects as it is developing a new regasification terminal.
However, it believes it is premature to incorporate earnings contribution or potential valuation uplift from such a project, as the group has yet to finalise its plan and submit its proposal to the Energy Commission.
