Gas Malaysia’s Q4 earnings crimped by higher tax rate

KUALA LUMPUR: Gas Malaysia Bhd’s earnings in the fourth quarter have been crimped by higher than expected tax rate, Affin Hwang Capital said.

Gas Malaysia’s fourth quarter profits ended December 2018 amounted to RM51.1 million.

Affin Hwang said after stripping off the RM9.4 million impairment write back on trade receivables, core net profit was lower at RM41.7 million, bringing the full-year profit to RM171 million.

The RM171 million core net profit was down 14 per cent year-on-year, which fell short of Affin Hwang and consensus expectation.

“The deviation was mainly due to a higher than expected effective tax rate. Total volume of natural gas sold increased by 5.5 per cent to 193.8MMbtu,” Affin Hwang said in a report.

The firm leaves its earnings forecast unchanged and maintain Gas Malaysia’s share price valuation at RM3, which implies an18 times forward of price to earnings.

“Gas Malaysia continues to offer among the best yields in our coverage at five per cent, based on an 85 per cent dividend payout ratio assumption,” it added.