PETRONAS Gas Berhad (6033) Q2 2024 earnings summary

Executive summary

• Q2 and 1H24 saw near 100% operational reliability, supporting stable revenue and sustained dividends, with profit for the period rising 2.0% year-over-year to RM963.2 million, driven by reduced financing costs and lower forex exposure after early USD lease liability settlement.

• Revenue for 1H24 was RM3,266.9 million, down 1.4% year-over-year, mainly due to lower Utilities segment revenue, partially offset by higher Gas Processing and Transportation income.

• EBITDA increased by 3.8% to RM1,706.8 million, and EPS rose 1.8% to 46.78 sen; interim dividend of 16 sen per share declared.

• Maintained world-class operational performance leveraging digitalisation and talent.

Financial highlights

• Gross profit remained stable at RM1,198.1 million, cushioned by lower operating costs despite lower revenue.

• Profit before tax for 1H24 rose 2.5% to RM1,212.1 million, mainly from reduced financing costs and forex exposure.

• Total assets as of June 30, 2024, stood at RM18.2 billion, down 5.8% due to a RM1.2 billion bullet repayment of Islamic financing.

• Cash and cash equivalents at RM2.5 billion, with sufficient headroom for growth projects.

• Total borrowings at RM1.99 billion as at 30 June 2024, down from RM3.15 billion at end-2023.

Outlook and guidance

• Business costs expected to remain high for the rest of 2024 due to persistent energy and commodity price volatility and inflationary pressures.

• Maintenance activities and costs are typically higher in the second half of the year.

• Utilities segment margins may see minor impact from ICPT and MRP adjustments, but overall effect is not significant.

• Growth projects, including two new power plants (Sabah and Labuan, each ~100 MW), are progressing, with CODs targeted for 2026 and 2028.

• Commitment to sustainability, targeting reduced GHG emissions and increased recycling rates.