PetGas among top losers, 1.61% drop at start of trade

PetGas said the lower net profit was attributed to a higher effective tax rate due to the imposition of the prosperity tax and lower pre-tax profit. ― Photo by Yusof Mat Isa

Friday, May 20, 2022 11:52 GMT

KUALA LUMPUR, May 20 ― Petronas Gas Bhd (PetGas) was among the biggest losers in early trading, falling 1.61%, following the announcement of lower net profit in the first quarter ended March 31, 2022 (Q1 2022 ) of RM410.58 million from RM516.40 million in the first quarter of 2021.

PetGas said the lower net profit was attributed to a higher effective tax rate due to the imposition of the prosperity tax and lower pre-tax profit.

However, the group recorded higher revenue for the quarter at RM1.46 billion compared to RM1.34 billion year-on-year, mainly due to higher revenue from the utilities segment due to higher prices. revenues and higher electricity volumes. As of 10.20am, the company fell 28 sen to RM17.08, with 144,500 shares changing hands.

Nonetheless, the research houses maintained their positive stance on PetGas.

In a note today, AmInvestment Bank said it has maintained its “buy” call on PetGas with an unchanged fair value based on sum of parts (SOP) of RM20.20, reflecting a 3% bonus for environmental, social and governance (ESG) rating of four stars.

“Awaiting an analyst briefing later today, we are maintaining our guidance at this time, although Group FY22 Q1 core net profit of RM418m was lower than expected. our expectations and those of the consensus.

“Over the past five years, the first quarter has represented a higher range of 24% to 27% of base earnings from FY17 to FY21, while the underperformance was primarily driven by increased of fuel costs in which internal gas consumption is passed on to the incentive regulatory mechanism for the transportation and gas regasification segments,” he added.

MIDF Research also reiterated its “buy” call with an unchanged target price (TP) of RM17.90 for PetGas.

“Calendar year 2022 (CY22) continues to plague the gas market with uncertainty, driven by Russian energy fuel sanctions amid tight global supply and rising regional demand.

“Meanwhile, gas prices had been on an upward trend since the start of CY22, providing the group with continued ability to take advantage of rising prices,” it said in a note today. distinct.

Nevertheless, MIDF Research estimated that the risk of instability taking into account global inflation will persist in the short to medium term.

“As the group maintained its resilience and strong performance across all of its facilities in the reporting quarter, we continue to view PetGas positively for periods to come, based on its sustainable revenue and revenue streams. and almost full use of the plant.

“Given the results of the first quarter of FY22 and the uncertainty surrounding oil and gas price volatility in FY22, we are revising our earnings guidance for FY22 and FY23 slightly to down 5% and 4% respectively,” he said.

Kenanga Research remained its “Market Perform” rating for PetGas, which is supported by its decent performance, with a revised TP of RM17.51 ​​from RM17.44.

“We are maintaining our guidance as our FY23 estimates have not yet factored in the new pipeline project.

“Going forward, we still like its resilient earnings profile which is reflected well in the share price,” he added. ― Bernama

Comments are closed.