Analyzing Merits Of Petronas Gas Bhd

K&N Kenanga has raised the revised net asset value (RNAV) of Petronas Gas, whose stock price closed at RM5.95 on Friday, to RM6.55 a share based on a turnaround in its centralised utility facilities (CUF) business, strength of gas demand from the power sector and commencement of new raw gas supplies from West Natuna.

For the first three months to June 30, Petronas Gas reported a 41% jump in group pre-tax profit to RM206.2mil.

Turnover was 17% higher at RM540.3mil, up from RM462.1mil previously. Net profit stood at RM147.7mil, an improvement of 41% over RM104.4mil in the previous corresponding quarter.

From the K&N Kenanga point of view higher revenues from its CUF business and higher gas throughput volumes had helped boost earnings. Average gas throughput volumes rose above the 2,000 mmscfd mark, which had triggered additional variable flow rate revenues.

Delivery of raw gas from Indonesia’s West Natuna field will enable Petronas Gas to ramp up gas production levels, enabling the company to earn additional revenues from additional flow rate charges when gas throughput volumes exceed the 2,000 mmscfd mark.

Petronas Gas has over RM1.2bil in its share premium account and over RM3bil in its retained earnings. The expectations are close to bonus but nothing’s certain.

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