KUALA LUMPUR (Nov 20): Petronas Gas Bhd’s net profit rose 10.01% year-on-year (y-o-y) in the third quarter ended Sept 30, 2023 (3QFY2023) on lower financing costs, taxes and expenses, but fell 3.48% quarter-on-quarter (q-o-q) on the back of weaker sales, amid planned plant turnaround in Kertih and lower product prices in the utilities segment.

PetGas’ 3QFY2023 net profit came in at RM468.46 million, up from RM425.82 million in 3QFY2022, as tax expenses fell 32% or RM48.65 million in absence of the prosperity tax, while financing costs fell 46.7% or RM20.7 million. Other expenses fell RM51.02 million or 79%.

The group posted earnings per share of 23.67 sen in the quarter, up from 21.52 sen in 3QFY2022. It declared a dividend of 18 sen per share, bringing its declared dividends for the year so far to 50 sen per share, unchanged from last year.

The better performance was despite a 9.69% drop in gross profit, on the back of a 0.93% drop in revenue to RM1.55 billion, from RM1.56 billion.

On a q-o-q basis, PetGas’ net profit fell to RM468.46 million from RM485.37 million, amid a 5.3% drop in revenue from RM1.64 billion.

For the nine-month period ended September (9MFY2023), PetGas' net profit rose 11.77% to RM1.38 billion, from RM1.23 billion, again thanks to lower expenses, financing costs and taxes, which more than offset the 5.27% decline in gross profit.

Revenue in the period rose 7.41% to RM4.86 billion, from RM4.53 billion, on higher contribution from the utilities segment as well as upward revision of imbalance cost pass-through surcharge and improved terms in its contract renewals.

In the period, results for the three gas-related segments (processing, transportation and regasification) all fell due to higher operating expenses on internal gas consumption and depreciation expenses, coupled with lower revenue due to lower transportation and regasification tariffs.

On prospects, PetGas expects to deliver “strong” financial performance in FY2023.

“Amidst higher operating cost environment post-pandemic, the group will continue to strive for operational excellence as well as to strike the right balance between growth investments, financial prudence and shareholders' distribution,” it said.

In a separate statement, PetGas managing director and CEO Abdul Aziz Othman said the group's performance in 9MFY2023 highlights its continuous focus on improving operational efficiency and cost optimisation, ensuring business resilience despite the gas industry's lower tariffs during the second regulatory period (RP2) and challenging market conditions.

"We are dedicated to improving our plant operations' reliability, safety, and cost-effectiveness, ensuring sustainable revenue with a healthy margin," Abdul Aziz said.

"Out focus remains on pursuing opportunities for growth and creating sustainable value aligned with the National Energy Transition Roadmap," he added.

Shares of PetGas settled four sen or 0.23% higher at RM17.18, giving it a market capitalisation of RM33.99 billion.