PETRONAS Gas Berhad Q2 2025: Navigating Challenges with Resilience and a Steady Hand
Hello fellow Malaysian investors and market watchers! We’re diving into the latest financial performance of PETRONAS Gas Berhad (PGB), a cornerstone of Malaysia’s energy infrastructure, for its second quarter ended 30 June 2025. This report offers a comprehensive look at the company’s operational strength and strategic direction amidst evolving market dynamics.
The headline? While PGB navigated a slight dip in overall revenue, its Profit for the Period saw a positive uptick of 0.9% year-on-year, demonstrating its underlying resilience. Furthermore, the Board of Directors has approved a second interim dividend of 16 sen per ordinary share, maintaining a consistent return to shareholders.
Join me as we unpack the numbers and strategic moves that shaped PGB’s performance this quarter and what they signal for the future.
Financial Performance: A Closer Look at the Numbers
Let’s start with the year-to-date performance (cumulative quarter ended 30 June 2025) compared to the same period last year. PGB’s journey this year has been marked by both strategic adjustments and operational events. Here’s how the key financial indicators stack up:
Cumulative Financial Highlights (Year-to-Date 30 June 2025 vs 2024)
| Key Financial Highlights | 2025 (RM’000) | 2024 (RM’000) | Variance (%) |
|---|---|---|---|
| Revenue | 3,184,884 | 3,266,882 | -2.5% |
| Gross Profit | 1,144,927 | 1,198,102 | -4.4% |
| Profit Before Taxation (PBT) | 1,207,164 | 1,212,087 | -0.4% |
| Profit for the Period | 971,608 | 963,240 | +0.9% |
| EBITDA | 1,694,421 | 1,706,796 | -0.7% |
| Earnings Per Share (EPS) (sen) | 46.44 | 46.78 | -0.7% |
| Declared Dividends Per Share (sen) | 32.00 | 32.00 | — |
As you can see, PGB’s revenue for the cumulative period dipped by 2.5% to RM3,184.9 million. This was primarily due to lower revenue from the Utilities segment, in line with reduced product prices, and the Gas Transportation segment, impacted by a downward tariff adjustment. Despite this, the company achieved a 0.9% increase in Profit for the Period, reaching RM971.6 million. This positive movement was mainly attributed to lower tax expenses, which helped cushion the impact of a slightly lower Profit Before Taxation (PBT).
Quarterly Performance Snapshot (Q2 2025 vs Q2 2024)
Let’s compare the latest quarter’s performance (Q2 2025) against the corresponding quarter last year (Q2 2024) to understand the immediate trends:
Q2 2025
Revenue: RM1,590.3 million
Gross Profit: RM569.2 million
Profit Before Taxation: RM595.3 million
Profit for the Quarter: RM479.6 million
EBITDA: RM842.3 million
Q2 2024
Revenue: RM1,648.1 million
Gross Profit: RM596.9 million
Profit Before Taxation: RM614.7 million
Profit for the Quarter: RM490.9 million
EBITDA: RM857.6 million
For the individual quarter, revenue declined by 3.5%, and profit for the quarter saw a 2.3% decrease. This was influenced by lower product prices in the Utilities segment and the aforementioned tariff adjustments in Gas Transportation. Additionally, costs associated with the gas supply restoration works following the Putra Heights fire incident in April 2025 impacted gross profit, though lower fuel gas costs provided some relief.
Segmental Review: The Engine Room of PGB
PGB operates through four core segments: Gas Processing, Gas Transportation, Regasification, and Utilities. Each plays a vital role, and their individual performance sheds light on the overall picture for the year-to-date:
Gas Processing
This segment maintained strong reliability, achieving nearly 100% Overall Equipment Effectiveness (OEE). While revenue saw a marginal 0.7% decline due to lower IGC (Internal Gas Consumption) incentives, segment results actually increased by 3.7%, thanks to lower operating expenses. This highlights efficient cost management within this critical segment.
Gas Transportation
The Group’s pipeline network experienced challenges, notably the Putra Heights fire incident in April 2025. While services were safely restored to the northern sector on 1 July 2025, the incident incurred significant costs. Revenue decreased by 5.2% due to downward tariff adjustments under the Incentive-Based Regulation (IBR) framework, and segment results fell by a more pronounced 17.8%, largely attributed to the restoration expenses.
Regasification
PGB’s LNG regasification terminals continued to deliver strong reliability. However, both segment revenue and results saw slight declines of 0.7% and 5.4% respectively. The revenue decrease was due to downward tariff adjustments, while higher operating expenses, mainly from increased maintenance activities, impacted profitability.
Utilities
This segment achieved almost 100% product delivery reliability. Revenue decreased by 3.7%, primarily due to lower product prices for steam and industrial gases, aligning with the lower Malaysia Reference Price (MRP) for fuel gas. Despite this, segment results improved by 3.3%, benefiting from lower fuel gas costs and reduced operating expenses.
Financial Health and Cash Flow
PGB’s financial position remains robust. As at 30 June 2025, total assets saw a marginal 0.5% increase to RM18.9 billion, driven by higher property, plant and equipment, partially offset by lower cash balances. Total equity attributable to shareholders also grew by 1.0% to RM14.1 billion, reflecting the profit generated during the period, albeit partially offset by dividends paid.
Looking at cash flows, PGB generated RM1,488.3 million from operating activities, a 6.7% increase year-on-year, thanks to improved working capital. However, net cash used in investing activities surged by over 100% to RM797.8 million, mainly due to higher capital expenditure. Net cash used in financing activities significantly reduced by 62.2%, as the previous year included a substantial bullet repayment of an Islamic financing facility.
Crucially, PGB declared a second interim dividend of 16 sen per ordinary share for the financial year ending 31 December 2025, payable on 22 September 2025. This brings the total declared dividends to 32 sen per share for the year-to-date, consistent with the previous year, underscoring PGB’s commitment to shareholder returns.
Outlook and Navigating Future Headwinds
PGB’s performance outlook for 2025 is anticipated to remain healthy, reflecting its continued operational strength. However, the company acknowledges potential headwinds.
The recent restructuring of electricity tariffs under Regulatory Period 4 (RP4) and the expanded scope of the Sales and Service Tax (SST), effective 1 July 2025, are expected to exert upward pressure on operating costs, potentially impacting profitability. These are industry-wide trends that PGB, like other major players, will need to carefully manage.
To counter these challenges, PGB is intensely focused on disciplined cost management and pursuing long-term strategic growth initiatives. The company’s unwavering commitment to operational excellence ensures a safe and uninterrupted gas supply nationwide, which is fundamental to its stability and value proposition.
Summary and Investment Recommendations
PETRONAS Gas Berhad has demonstrated a resilient performance in Q2 2025, successfully converting a slight revenue decline into a modest profit increase for the cumulative period. The company’s core operations remain stable, supported by strong reliability across its segments, even as it navigates specific challenges like the Putra Heights incident and broader market shifts.
The consistent dividend declaration highlights management’s confidence and commitment to shareholder value. While external factors like tariff restructuring and increased SST pose cost pressures, PGB’s strategic focus on cost efficiency and operational excellence provides a strong foundation for future stability.
Key points from this report include:
- Despite a 2.5% dip in cumulative revenue, PGB achieved a 0.9% increase in Profit for the Period year-on-year, driven by lower tax expenses.
- Operational challenges, particularly the Putra Heights fire incident, impacted the Gas Transportation segment’s profitability, but gas supply services have been restored.
- The Utilities segment saw revenue contraction due to lower product and fuel gas prices but improved segment results through cost management.
- PGB maintains a robust financial position with increased total assets and equity.
- A second interim dividend of 16 sen per share was declared, bringing total declared dividends to 32 sen per share for the year-to-date, consistent with the previous year.
- The company anticipates a healthy outlook for 2025 but acknowledges potential cost pressures from new electricity tariffs and expanded SST.
- Management’s strategy includes disciplined cost management and long-term strategic growth to ensure business continuity.
This report underlines PGB’s foundational strength in the Malaysian energy sector and its proactive approach to managing both operational incidents and macro-economic shifts. It’s a reminder that even established giants must constantly adapt and optimize.
What are your thoughts on PGB’s performance this quarter? Do you believe their strategies for cost management and operational excellence will be sufficient to navigate the upcoming challenges of tariff restructuring and increased SST? Share your insights in the comments below!
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