Petronas Gas expected to record stable performance until end-year

by · Borneo Post Online
PetGas will also continue to find opportunities to expand its facilities in all segments, in line with the energy transition efforts highlighted in the NETR and the anticipated Carbon Tax by 2026. – Photo from Petronas

KUCHING (Nov 29): Petronas Gas Bhd’s (PetGas) near-term prospects have been viewed positively with analysts expecting the group to continue optimising its cost efficiency strategies against inflationary pressures and macro factors.

The research team at MIDF Amanah Investment Bank Bhd (MIDF Research) reiterated its optimism for PetGas’s near-term prospects.

“PetGas is expected to continue optimising its cost efficiency strategies to minimise the adverse impact of inflationary pressures and any unfavourable forex, while prioritising sustainable growth and shareholders’ returns.

“With the recent Letter of Notification (LON) for the 100MW power plant project in Kimanis, Sabah, and the 120MW power plant project in Labuan, we anticipate that PetGas will continue to uphold its commitment in sustainable energy conservation and transition in the utility’s subsector.”

Aside from that, the research team also believes that PetGas will also continue to find opportunities to expand its facilities in all segments, in line with the energy transition efforts highlighted in the National Energy Transition Roadmap (NETR) and the anticipated Carbon Tax by 2026.

“Challenges in terms of the volatile commodity and energy prices, uncertainties in forex and elevated service provider pricing are expected to persist and subsequently increase opex in the near future.

“Other downside risks to PetGas’s near-term prospects also include regulation, policy and legal changes for refinery and transportation, notably on the acceptance of natural gas as a fuel source in replacement of other carbon-heavy fuel such as coal,” it added.

On PetGas’ 9MFY24 earnings result, MIDF Research said it came in within its yearly earnings estimates.

PetGas’s 9MFY24 revenue gained by +1.2 per cent to RM4.9 billion and the higher revenue was mainly contributed from gas processing, following higher reservation charges income under the new term.

This was offset by lower product prices from utilities.