Gas Malaysia's bottom line outlook largely intact
PETALING JAYA: Affin Hwang Investment Bank Research projects Gas Malaysia Bhd 's 2025 earnings to decline by 11% on lower gas prices and compression in gas shipping margins, but notes that its earnings outlook is largely intact.
'We anticipate the group to report lower core net profit of RM391mil for 2025 due to lower profit margin from Gas Malaysia Energy and Services under the new gas shipping agreements and declining natural gas selling prices, tracking weaker global crude oil prices and the strengthening of ringgit to US dollar,' it said.
The research house said the lower natural gas prices are tracking weaker global crude oil prices as the global oil market is likely to enter an oversupply phase this year and next, assuming no major disruptions to oil supply.
It explained that lower oil prices will be driven by the Organisation of the Petroleum Exporting Countries and allies acceleration in unwinding its voluntary supply cut program, coupled with slowing demand growth from China.
'Global demand growth will continue to be led by Asia Pacific, particularly India, while demand in other regions is expected to remain relatively flat,' Affin Hwang Research added. It forecasts 2025 and 2026 Brent crude oil prices to be at US$70 per barrel and US$65 per barrel, respectively, implying a 13% and 19% decline from 2024 average Brent crude price of US$80 per barrel.
However, it believes higher natural gas sales volume, driven by market share gains, should help cushion the impact.
That said, the research house likes Gas Malaysia's prospects as it is developing a new regasification terminal.
However, it believes it is premature to incorporate earnings contribution or potential valuation uplift from such a project, as the group has yet to finalise its plan and submit its proposal to the Energy Commission.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
42 minutes ago
- New Straits Times
Ringgit likely to trade cautiously next week amid US tariff concerns
Bernama KUALA LUMPUR: The ringgit is anticipated to trade cautiously against the dollar next week as investors monitor external developments, particularly regarding United States tariffs. In a research note, Kenanga Investment Bank Bhd stated that the ringgit should find support from domestic economic stability and a softer US dollar, likely holding near current levels. "President Donald Trump's proposed chips and pharmaceutical tariffs will likely dampen sentiment in risk assets. Investors are also tracking pressure on BRICS and signs of strain in the US-China trade detente. "Trump's rapid-fire policy moves and media headlines continue to drive market uncertainty," it said. As such, the research firm said the ringgit has traded higher this week, hovering within the range of 4.23-4.24 after a weaker-than-expected US jobs report pulled the greenback lower. On a Friday-to-Friday basis, the ringgit ended the week higher against the greenback, closing at 4.2420/2480 versus 4.2750/2815 previously. However, the local note traded lower against a basket of major currencies. On Friday, the ringgit depreciated vis-à-vis the Japanese yen to 2.8720/8763 from 2.8407/8452 the previous week, declined against the British pound to 5.7034/7114 from 5.6208/6293 and eased versus the euro to 4.9381/9451 from 4.8752/8826. The ringgit also trended lower against Asean currencies. The local note slipped against the Singapore dollar to 3.3014/3064 from 3.2907/2960 at the end of last week, inched down versus the Thai baht to 13.1173/1419 from 13.0058/0319, slid versus the Indonesian rupiah to 260.3/260.8 from 258.8/259.4 and edged down against the Philippine peso to 7.43/7.44 from 7.35/7.36 in the preceding week.
New Straits Times
an hour ago
- New Straits Times
Hazelnut prices soar after April frost damages Turkish harvest
ISTANBUL: Wholesale hazelnut prices have surged this harvest season following frost damage in Turkey, the world's largest producer, reported German Press Agency (dpa). According to the Amsterdam-based commodity data platform Vesper BV, a metric tonne of Turkish hazelnuts now costs around €9,400 (US$10,900) – an increase of roughly 34 per cent since the start of the year. In April, a cold snap damaged Turkey's crop, pushing prices higher even before the harvest began. Agriculture Minister Ibrahim Yumakli called it one of the worst frost weather condition in Turkey's history. Experts have pointed to climate change, which they say is making extreme weather events more frequent, as the underlying cause. Around 60 per cent of the world's hazelnuts grow primarily on the green mountain slopes along Turkey's Black Sea coast, where the nut is called "green gold" because of its economic importance. Hamburg trading house Schlüter & Maack estimates that wholesale prices for Turkish hazelnuts have risen by about 40 per cent since the cold snap. Surplus from previous harvests and good yields in other producing countries have partly offset the losses. In Turkey, the state Grain Board – a kind of market regulator – raised the minimum purchase price for hazelnuts just days ago. This year, the price is about €4.20 (US$4.89) per kilogramme. Measured in the local currency, the lira, which has been repeatedly devalued, this amounts to an increase of more than 50 per cent. The last major frost-related crop failure in Turkey occurred in 2014.
New Straits Times
an hour ago
- New Straits Times
Egypt's annual urban consumer price inflation down to 13.9pct in July
CAIRO: Egypt's annual urban consumer price inflation dropped to 13.9 per cent in July from 14.9 per cent in June, data from statistics agency CAPMAS showed on Sunday. Urban food and beverage prices were down three per cent overall compared to June 2025 but rose by 3.4 per cent against July 2024. Urban inflation on a monthly basis inched down in July by 0.5 per cent compared to June, as meat and poultry prices were down by 4.9 per cent, fruits by 11 per cent and vegetables by seven per cent, while the prices of bread and cereals were up by 0.4 per cent and seafood by 0.2 per cent. Egypt's annual inflation has plunged from a record high of 38 per cent in September 2023, helped by an US$8 billion financial support package agreed with the International Monetary Fund in March 2024.
