18 May 2012
Gas Malaysia IPO Update: Gas Malaysia's 2011 net profit decreased 23% and net margins dropped from 26.3% to 12.5% due to new gas tariff, Gas Malaysia will be exposed to the new gas tariff through the whole of 2012 and not only six months during last year - Managing Director Datuk Muhamad Noor Hamid
The three major shareholders of Gas Malaysia Bhd will receive a total of RM734mil from the sale of their shares in the former's impending initial public offering (IPO).
Gas Malaysia's IPO will entail only an offer of sale of 333.8 million shares at RM2.20 a piece.
The three main owners of Gas Malaysia stock are MMC-Shapadu (Holdings) Sdn Bhd (55%), Tokyo Gas-Mitsui & Co Holdings Sdn Bhd (25%) and Petronas Gas Bhd (20%). The three will rake in RM403mil, RM183.6mil and RM146.8mil respectively from the sale of Gas Malaysia shares.
Post IPO, MMC-Shapadu would see its stake reduced to 40.7%, while Tokyo Gas-Mitsui at 18.5% and Petronas Gas with a 14.8% stake.
MMC-Shapadu is a 76% owned subsidiary of MMC Corporation Bhd, while Shahpadu Corporation Sdn Bhd owns the rest of the stake, a company that dabbles in a diverse range of businesses ranging from oil and gas to property development.
Speaking at a recent interview, Gas Malaysia Bhd managing director Datuk Muhamad Noor Hamid said he expected a potential double digit growth in gas volume supplied for 2013 to drive the company's revenue moving forward.
In February 2012, Gas Malaysia signed a gas supply agreement with Petronas for the supply of 492 million standard cubic per day (mmscfd), a 29% increase from its previous supply of 382 mmscfd.
The new agreement starting January 2013 will be for a duration of 10 years with an option to renew for another five years.
For its financial year ended 2011, the company hit a revenue of RM2bil from RM1.8bil recorded previously, driven by the gas tariff revision announced by the government, which took effect on June 1, 2011, in addition to increase in sales volume.
However, its net profit decreased by 23% to RM229mil in 2011 from RM298mil recorded in the previous year due to the new gas tariff, which resulted in Gas Malaysia's average margin declining by 48.9% to RM2.02 per mmBtu, or just 12.5% as margins compared to 26.3% recorded previously.
“We should be doing fine this year in terms of revenue and volume.
“The only thing that will be impacted would be our net profit as we will be exposed to the new gas tariff through the whole year and not only six months during last year,” he said.
He said the net profit would be lower but still very healthy and would grow in tandem with the new increase in volume to be supplied to its customers.
The company intends to pay out 100% of its net profit for its financial year ending Dec 31, 2012, and subsequently targets a payout ratio of not less than 75% of its net profit moving forward.
Gas Malaysia will be publishing its prospectus today, and is enroute to be listed on the Main Market of Bursa Malaysia on June 11.
Established in 1992 to provide an alternative source of energy to the country, it sell, market and distribute natural gas as well as construct and operate the Natural Gas Distribution System in the peninsular.
It operates a network of approximately 1,800 km of pipelines throughout the peninsular, and source its natural gas supply from Petronas via the Peninsular Gas Utilisation Transmission System which is owned and operated by Petronas Gas Bhd.