By Bernama

KUALA LUMPUR: Shares of Gas Malaysia Bhd on Bursa Malaysia were flat at RM2.99 this morning amid the falling oil prices.

At 10.54 am, a total of 2,500 shares were transacted. The stock opened one sen better this morning.

Although Gas Malaysia announced bullish performance for the second quarter ended June 30, 2017 (2Q17) yesterday, it was insufficient to boost the stock.

In 2Q17 ended June 30, 2017, Gas Malaysia’s pre-tax profit rose to RM51.25 million from RM49.77 million in the same period last year.

Revenue increased to RM1.29 billion from RM973.80 million previously due to higher volume of gas sold, upward revision of natural gas tariff and higher tolling fees.

Kenanga Reseach said there were no surprises in the 2Q17 results and expected earnings to pick up further in the second half of this year after a slow start in the first quarter.

MaybankIB Research said Gas Malaysia did not disclose gas cost imbalances again, but based on reported revenue and gas cost, it appeared the company likely under-recovered on gas cost in the quarter.

“With only RM98 million of over-recoveries at end-2016, and likely under-recoveries in the first half this year, it is not clear for now how the relatively sizeable second half 2017 tariff rebate amounting to, at least RM135 million would be funded.

“The company will hold a briefing this morning,” the research firm said in a note today.

Both Kenanga Research and MaybankIB had maintained their ‘Market Perform’ and ‘Hold’ recommendations on Gas Malaysia respectively with unchanged target price of RM3.18 and RM3.20 respectively.

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