1Q24 Outclassed Expectations, Yet Operational Challenges Linger
Key Takeaways:
▪️In 1Q24, PGAS recorded a distribution margin of USD2.46/MMBtu (+26.1% QoQ/+39.9% YoY) with gas distribution volume of 858BBTud (-7.0% QoQ/12.1% YoY). Management targets USD1.6-1.8/MMBtu distribution spread (vs USD1.95/MMBtu in FY23A) with 954BBtud volume for this year (vs 923BBtud in FY23A).
▪️PGAS posted a revenue of USD949.3million in 1Q24 or grew by +1.7% YoY but declined -0.7% QoQ. Although the efficiency in COGS and financial costs resulted to a better-than-expected net income of USD121.1million in 1Q24 (+52.2% QoQ/ +40.8% YoY) despite the flat top-line growth.
▪️We maintain a HOLD recommendation for PGAS with a TP of IDR1,550/share (+8.0% upside), implying 2.6x of FY24E EV/EBITDA.
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