KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Earnings Snapshot
Petronas Gas Bhd (KL:PETGAS) reported a 2.3% YoY decline in 2QFY2025 net profit to RM450.2 million (22.75 sen per share), weighed down by softer revenue and higher expenses.
Revenue: RM1.59 billion (–3.5% YoY)
Net Profit: RM450.19 million (–2.3% YoY)
Dividend: 16 sen/share (RM316.6m), ex-date Sept 12, payable Sept 22
1H25 Performance: Net profit RM919m (vs. RM926m a year earlier), revenue RM3.18b (–2.5% YoY)
Shares were steady at RM18.96 before the results announcement, valuing the company at RM37.5 billion.
Key Drivers
Lower Revenue: Decline in gas transportation earnings due to tighter regulated margins.
Higher Costs: Expenses linked to pipeline restoration after the April Putra Heights explosion.
Tariff & Tax Impact: Restructuring of electricity tariffs and an expanded sales & service tax (SST) expected to further pressure operating margins going forward.
Operational Update
Pipeline Incident (April 2025): Explosion disrupted gas supply and displaced over 500 residents.
Recovery Progress: Service restored to the northern sector in July; permanent replacement works underway.
Safety & Repair Costs: Contributed to margin squeeze in 1H25.
Outlook
Management flagged a challenging operating environment:
Tariffs & SST: Expected to exert upward pressure on costs and compress profitability.
Gas Transportation Margins: Regulated returns remain under pressure, limiting upside.
Near-Term Focus: Restoration works and cost controls to mitigate headwinds.
Investment Implications
Dividend Appeal: Despite earnings pressure, dividend payout remains steady, supporting PETGAS’s yield-driven investor base.
Earnings Headwinds: Margin compression from tariff reform, taxes, and pipeline-related costs may cap near-term profit growth.
Valuation: At RM18.96, PETGAS trades as a defensive, yield-oriented play in Malaysia’s utilities/energy space, but limited earnings growth could weigh on re-rating potential.
Bottom Line
Petronas Gas remains a stable dividend provider but faces earnings headwinds from rising costs and regulatory changes. While operational recovery post-pipeline incident is on track, investors should expect muted near-term growthwith valuation support anchored in dividends rather than earnings expansion.
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