Release Date: November 27, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Petronas Gas Bhd (XKLS:6033, Financial) reported a slight increase in group revenue by 1.2% to 4.9 billion Ringgit, primarily driven by higher revenue from the gas processing segment.
- The company achieved nearly 100% operational excellence across all business segments, demonstrating world-class performance.
- Profit for the period rose by 4.8%, attributed to a reduction in financing costs and favorable foreign exchange movements.
- The company maintained a strong dividend payout, with a dividend per share approved at 18 cents, reflecting its commitment to shareholder returns.
- Significant progress was made in growth projects, including the development of a 100 MW power plant in Sabah, expected to start operations by March 2026.
Negative Points
- The cost of doing business remained elevated, with the Service Producer Index (SPPI) increasing to 115.8 points, indicating high business costs.
- Higher operating expenses were reported due to increased maintenance activities and depreciation, impacting financial performance.
- The utilities segment faced lower revenue due to decreased product prices, despite higher customer offtake.
- The company's financial performance was impacted by the government's ICPT adjustment, affecting revenue and profit margins in the utility segment.
- There is an expectation of continued high maintenance costs and depreciation in the upcoming fourth quarter, which could further impact financial results.
Q & A Highlights
Q: Are we expecting higher maintenance costs and depreciation in the upcoming fourth quarter for all segments?
A: Yes, we expect higher maintenance activities and spending in the fourth quarter as we move deeper into the year. This will likely result in higher depreciation due to capitalizing on growth projects.
Q: How much is the PBS for gas processing in the latest quarter? Did you get the full amount?
A: Up to September 2024, we maximized the PBS incentive, collecting RM17 million. If operational performance sustains, we can achieve the maximum PBS for the year, which is slightly less than RM100 million.
Q: Is the year-to-date volume for gas transportation and regasification in line with the assumed volume?
A: The business of regasification is based on capacity payment, so the volume does not significantly impact financials. The capacity is fully reserved, and we collect full revenue irrespective of utilization.
Q: What are the key drivers for the better utility business performance despite the lower ICPT surcharge?
A: The improved performance is due to higher volume uptake from customers and slightly lower gas prices, which negated the impact of the lower ICPT surcharge.
Q: What is the expected regasification requirement corresponding to the projected increase in gas demand due to data centers?
A: We anticipate a 50% to 70% increase in gas demand, which may require a new regasification terminal of similar or slightly larger size than our current units.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
