The Putra Heights pipeline explosion in April slightly dented Petronas Gas Bhd’s (PGB) quarterly earnings as the group recognised the cost incurred for gas supply restoration works.
Its net profit dipped 2.3% to RM450.1 million for the second quarter ended June 30 (Q2 FY2025) from RM468.9 million a year ago as revenue fell and expenses rose. Revenue fell 3.5% year-on-year (y-o-y) to RM1.59 billion from RM1.64 billion, it said in a bourse filing yesterday.
For the first six months of FY2025, net profit was 0.7% lower at RM918.9 million from RM925.6 million last year while revenue slipped 2.5% y-o-y to RM3.18 billion.
TA Research said the group’s first half core net profit came in “within expectations”, accounting for 49% of its and street estimates.
On the drop in Q2 profit, it said PGB was mainly dragged by the gas transportation segment (gross profit: -23% y-o-y) due to recognition of cost incurred for gas supply restoration works following the Putra Heights incident.
“This is in line with earlier guidance of a RM60 million impact to FY2025F earnings, whereby more than a third of the cost is estimated to have been captured in Q2 FY2025,” the research house said in a note today.
However, it noted the weakness at the gas transportation segment was partly cushioned by improved performance at the utilities segment (gross profit: +14% y-o-y) following lower fuel gas cost which drove higher margins.
The gas processing segment saw slight uptick in gross profit given lower operating cost, while the regasification segment was slightly impacted by higher maintenance cost during the quarter, it added.
The huge blaze on April 1 destroyed dozens of homes and about 150 people had to seek treatment at hospitals. More than 500 people were displaced from their homes.
Gas supply restoration works
TA said restoration works on pipeline assets following the Putra Heights incident involve two phases. Phase 1 restoration of gas supply via a temporary bypass pipeline was successfully completed in July 2025.
“These costs, estimated at RM26 million, are expensed out given the expected short life of the bypass pipeline. Phase 2 involves construction of a permanent pipeline targeted for completion by Q3 FY2026,” it said.
It said PGB had earlier guided the total financial impact of RM170 million associated with repair works and asset restoration, with a “substantial portion” to be capitalised.
TA maintained its “buy” recommendation on PGB with a slightly higher target price of RM20.58 from RM20.21 previously.
“Petronas Gas is positioned well as one of the key upstream proxies to the energy transition from coal to gas as well as data centre-driven demand for power, being the largest gas infrastructure owner and operator in the country.
“Dividend yield is decent at 4.2%–5%, backed by long-term contracts and regulated businesses,” it added.
A second interim dividend of 16 sen per share amounting to RM316.6 million was declared, bringing first half FY2025 dividend to 32 sen.
PGB closed 40 sen or 2.1% lower today at RM18.60, giving it a market capitalisation of RM36.8 billion.
