KUALA LUMPUR (Aug 20): Petronas Gas Bhd (KL:PETGAS) has reappointed Datuk Adif Zulkifli as its non-independent, non-executive chairman, effective Tuesday.

In a bourse filing, PetGas said Adif succeeds Adnan Zainol Abidin, who tendered his resignation "due to top management mobility" within Petroliam Nasional Bhd (Petronas).

Petronas holds a 51% stake in PetGas, Malaysia's largest pipeline network operator.

Adif's appointment back to PetGas follows his recent appointment as Petronas executive vice president (EVP) and CEO of the group's gas and maritime business earlier this year.

Prior to this, Adif, 54, was appointed as EVP and CEO of Petronas' upstream business in 2020. Before that, Adif served as PetGas' chairman from in 2019-2020.

Adnan, meanwhile, is Petronas' chief operating officer (COO), a role he has held since March 2022. He served as PetGas chairman for a little over two years from July 2020.

Adif joined Petronas in 1993 as a reservoir engineer and has held various leadership roles, including EVP and CEO of the gas and new energy business, senior vice president of development and production upstream business, and senior vice president of corporate strategy.

PetGas noted that Adif’s ties with Petronas might present a potential conflict of interest, and it plans to implement measures to address and monitor these conflicts.

PetGas' shares gained two sen or 0.11% to RM18.18 on Tuesday, valuing the company at RM35.97 billion.

2Q net profit down 3.4%

In a separate filing, PetGas reported a 3.4% decline in net profit to RM469 million for the second quarter ended June 30, 2024 (2QFY2024), from RM485.4 million a year earlier. Earnings per share dropped to 23.7 sen from 24.53 sen.

The company said quarterly revenue inched up 0.7% year-on-year to RM1.65 billion from RM1.64 billion, primarily due to higher revenue from gas processing and transportation, driven by increased reservation charges and tariff adjustments. This increase was partially offset by lower revenue in the utilities segment due to reduced product prices.

The group declared a second interim dividend of 16 sen, payable September 19, bringing the total dividend for FY2024 to 32 sen.

For the first six months of FY2024, PetGas posted an 11.8% increase in net profit to RM925.6 million, up from RM909.6 million in the previous January-June period. The company attributed this to reduced financing costs and less impact from foreign exchange changes following the early repayment of US dollar lease liabilities, though it was partially offset by lower contributions from joint ventures.

Meanwhile, half-year revenue slipped 1.4% to RM3.27 billion from RM3.31 billion, mainly due to lower revenue from the utilities segment despite higher sales volume.

Looking ahead, PetGas expects the elevated Malaysia Reference Price, which correlates with fuel gas price movements, to impact the utilities segment’s performance.

However, the company remains focused on cost efficiency to mitigate rising operating costs and anticipates minimal impact from foreign exchange fluctuations following the settlement of lease liabilities for floating storage units in May 2023.

“Our results demonstrate PetGas’ continued operational excellence. We are poised to maintain our strong performance throughout the remainder of 2024,” said group managing director and chief executive officer Abdul Aziz Othman.