PGN first-quarter net rises 34% on transmission fees
PGN first-quarter net rises 34% on transmission fees
Bloomberg, Jakarta
PT Perusahaan Gas Negara, Indonesia's state-controlled gas distributor, said first-quarter profit rose 34 percent on higher transmission fees and gas sales.
Unaudited net income in the three months ended March 31 increased to Rp 197.5 billion (US$$21 million) from Rp 147.6 billion, the company told the Jakarta Stock Exchange in a statement today, without providing earnings per share.
Jakarta-based Perusahaan Gas, which relies on domestic sales and fees earned distributing gas for most of its revenue, started transmitting gas to Singapore in 2003.
"This is a fantastic company to hold -- it's like collecting toll fees for use of their pipeline," said Ami Tantri, a natural resources analyst at JPMorgan Chase & Co. in Jakarta. "The fees for the pipeline to Singapore now represent about one-fifth of sales."
Sales rose 31 percent to Rp 1.21 trillion from Rp 922 billion, it said. The company more than doubled revenue from distributing and transporting gas to Rp 166.3 billion from Rp 74.79 billion in the same period in 2003.
The shares rose Rp 125, or 4.8 percent, to Rp 2,750 at the 4 p.m. close in Jakarta, matching the close on March 14. They have gained 45 percent this year, more than the 3.3 percent increase in the benchmark Jakarta Composite Index.
Tantri has an "overweight" recommendation for the stock with a 12-month target price of Rp 2,500 and may change her recommendation or target, she said. She had raised the price target on Jan. 19 from Rp 2,000 in her Nov. 30 report.
The company is building a 180-kilometer pipeline linking South Sumatra province with West Java to boost revenue.
"You don't want to sell this company," Tantri said. "Once that South Sumatra pipeline is done, it will enjoy good cash flow."
Higher sales helped offset the effect of lower interest rates. While interest costs fell 34 percent to Rp 55.8 billion, the company's interest revenue from holding time-deposits and cash savings declined more, dropping 86 percent to Rp 10.3 billion, the profit statement said.
The company also incurred a foreign exchange loss of Rp 46.34 billion, compared with a foreign exchange gain of 8.49 billion in the first quarter of 2004.