Period 3Q14/9M14
Actual vs. Expectations 3Q14 results were within expectations with 9M14 net profit of RM144.3m accounting for 76% of both our FY14 full-year estimates as well as market consensus.
Dividends No dividend was declared as expected.
Key Results Highlights 3Q14 net profit rose 10% sequentially to RM53.8m; the strongest quarterly earnings since 4Q11, from RM48.9m on the back of 8% hike in revenue to RM734.4m from RM678.0m in the preceding quarter. This was partly driven by higher sales volume in addition to the new gas tariff structure which took effect in May 2014 attributable to higher topline growth as full quarter impact was captured in 3Q14 compared to just one-month impact in 2Q14.
On a YoY comparison, 3Q14 net profit leapt 16% from RM46.2m in 3Q13 as revenue surged 26% from RM678.0m. YTD, 9M14 net profit grew 10% to RM144.3m from RM131.3m while turnover rose 16% to RM1.99b from RM1.71b. The improvement in topline was mainly driven by: (i) higher sales volume on higher gas supply secured from the Melaka RGT and (ii) the new gas tariff mentioned above. The improved bottom-line was mainly attributable to higher sales volume.
Outlook With barely any change in its profit margin spread under the new tariff, FY14 is expected to be another strong year with full-year earnings impact from the 40MMScfd gas supply which started from July 2013 and another new additional 30MMScfd commencing Jan 2014 from the Melaka RGT.
However, it may not be easy for GASMSIA to sustain profit margin spread going forward given the dynamic of LNG prices. Nonetheless, forward business volume will be supported by the last portion of the 40MMScfd additional gas supply from the Melaka RGT which will be coming on-stream in Jan 2015.
Changes To Forecasts No change to our FY14E-FY15E estimates.
Rating Maintain MARKET PERFORM
Valuation Price target is maintained at RM3.54/DCF share.
Risks To Our Call A surprise increase in gas supply allocated by Petronas and wider margin spread.
Source: AmeSecurities
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