Petronas Gas - FY12 in line, Melaka RGT the focus now

Period    4Q12

Actual vs. Expectations  The FY12 results met our expectations with the core net profit of RM1.31b coming in 5% below our estimates and 9% below that of the market consensus. We believe that the consensus number may not have been adjusted for the RM100m disposal gain of  Gas Malaysia Bhd (“GASMSIA”, OP; TP: RM2.94) pursuant to its IPO exercise in 2Q12. 

Dividends   A single-tier DPS of 35 sen was declared in 4Q12, taking the full-year NDPS to 50 sen, slightly higher than our projection of 48.5 sen. 

Key Results Highlights  The 4Q12 net profit dipped 7% QoQ to RM295.2m despite revenue rising 5% over the quarter to RM909.0m due to the higher unrealised forex loss and other expenses. The improvement in the top line was mainly due to its higher performance-based structure income, which was in line with the higher export volume and prices for propane and butane.

 On a YoY comparison, the 3Q12 net income declined 14% from RM344.1m while revenue dipped 1% over the period from RM921.1m. Apart from the higher unrealised forex loss and other expenses, a lower gas processing revenue also contributed to the contraction in earnings.

 All in, the FY12 reported net earnings rose 4% YoY to RM1.41b as it included the RM100m GASMSIA disposal gain while there was also a RM119.2m impairment of asset and inventory in FY11. The FY12 revenue was down 2% to RM3.58b from RM3.66b due to the lower revenue contribution from its gas processing unit.  

Outlook   Although the launch of the Melaka RGT has been delayed to 2Q13, it will still be the new earnings kicker for FY13 while the Kimanis IPP will take PETGAS’ FY14 earnings to new heights. 

Changes To Forecasts    We are keeping our FY13-FY14 estimates unchanged for now.   

Rating    Maintain MARKET PERFORM

 

Valuation    Our price target is maintained at RM19.86/SOP share.

Risks   The delay in the commencement of Melaka RGT, Kimanis IPP and Lahad Datu RGT.    

Source: Kenanga