Petronas Gas’ 1Q23 core net profit was in line with the forecast says Maybank IB, which serves as a gauge for the earnings run-rate in RP2. Upcoming quarterly earnings could potentially be boosted by lower gas costs, although maintenance activities would likely remain elevated the house added.
Excluding unrealised forex, PTG’s 1Q23 core net profit of MYR423m represents 24%/22% of our/consensus full-year forecasts respectively. The new RP2 tariffs for transport and regas took effect this quarter. Gas price trended higher QoQ, but overall internal gas cost was lower sequentially due to prior quarter adjustments made during 4Q22. A 16sen interim DPS was declared, unchanged YoY.
As for segmental trends in 1Q23 they were generally in line with expectations. Processing EBIT was higher QoQ due to lower maintenance expenses. Transport EBIT normalised following elevated internal gas cost (including prior quarter adjustments) in 4Q22. Utilities EBIT was also higher QoQ following Tenaga’s imposition of tariff surcharges for the non-domestic segments. Regas was the only segment to post sequentially lower EBIT in the quarter, likely due to the lower profitability run rates from RP2.
Management noted that maintenance activities would likely remain elevated for FY23. Internal gas cost should however trend lower in the coming quarters given the downtrend in gas prices (PTG does not accrue theoretical gas cost). Maybank IB earnings forecasts and MYR17.00 TP are unchanged. The house maintains HOLD on the stock.
