[Non-English content] and good morning, everyone.
Yeah, testing.
Welcome to PETRONAS Gas Berhad's analyst briefing for the fourth quarter ended 31st December 2025. Thank you for joining today's session organized via the Microsoft Teams platform. Just to get things organized, can I have someone say something through Teams just to see if we're connected?
Hello. Testing.
Thank you. I am Suri, Head of Investor Relations PGB. I have with me Encik Abdul Aziz Othman, Managing Director and CEO of PETRONAS Gas Berhad, Encik Shahrul Azham Sukaiman, Chief Financial Officer, as well as Encik Wan Khairul Nizam Wan Kassim, Head of Business Development and Commercial. PETRONAS Gas Berhad's analyst briefing for the quarter ended 31st December 2025 is divided into four segments. The first segment, Encik Aziz will present the key highlights for PETRONAS Gas Berhad for the financial year 2025. Next, in the second segment, the business updates and financial performance will be shared by Encik Shahrul Azham. Following that, there will be a briefing on the recently announced RP3 tariffs by Encik Wan Khairul Nizam. In the third segment, Encik Aziz will share PGB's focus moving forward. Finally, we will open the session for Q&A.
All participants are reminded to obey the session's rule, where everyone should be on mute throughout the presentation. The presentation was also shared with you prior to the session through this Microsoft Teams channel for your reference. You are allowed to ask questions during the Q&A. Please be reminded to press the raise hand button. We will open the microphone for the selected participant. You may also post your question in the chat box. We will select any question to be answered. For reference, our financial results is now available at both Bursa Malaysia and PGB website. To continue with the briefing, I call upon Encik Aziz to share his presentation.
Thank you, Suri. [Non-English content] and good morning, everyone. Thank you for joining us. I am pleased to share with you PETRONAS Gas Berhad financial year 2025, formal results. Over the past quarter and throughout 2025, PGB continued to operate in a challenging and dynamic environment. While inflationary pressures and market volatility kept the overall cost of doing business elevated, the strengthening of ringgit provided a partial cost relief, helping to moderate the impact of the external pressures on the group operations. Ringgit strengthened against USD throughout financial year 2025, appreciating to MYR 4.15 per USD by quarter four, supporting cost management efforts and helping to limit the impact of foreign exchange movements on projects economics. The Malaysia Reference Price, the MRP, declined further to MYR 36.64 per MMBtu. This is consistent with the softening trend from 2024.
Looking ahead, MRP is projected to ease to about MYR 33 per MMBtu in quarter one 2026. This broadly tracking the expected movement in Brent crude prices. Meanwhile, as we have indicated previously, Suruhanjaya Tenaga has implemented a new electricity tariff structure under the Electricity Regulatory Period 4, effective 1st July 2025, together with revisions to the fuel cost adjustment mechanism, which is adjusted monthly. This new structure replaces the previous tariff structure that has been in place since 2014. The new RP electricity tariff includes a component of Automatic Fuel Adjustment or AFA. This is similar to the ICPT mechanism. For the first six months, there have been a rebate resulting in unfavorable impact to our utilities segment relative to the prior years. Strategies and mitigation measures are in place, of course, to manage the cost implications and maintain operational efficiency under the new tariff regime.
Against this backdrop of challenges in the external environment, PGB continued to maintain a healthy and stable performance throughout FY 2025. Compared to 2024, the group demonstrated resilience in 2025 through disciplined operations, proactive asset management, and sustained cost optimization efforts. PGB group revenue stood at MYR 6,374 million, a decrease of 2.5% or MYR 164 million, primarily attributable to lower product prices in the utilities segment and downward tariff adjustment in the gas transportation segment. The gross profit declined by 5.7%, or MYR 129 million. Mainly, again, due to the lower margins in the gas transportation segment, reflecting the reduced revenue coupled with cost incurred for gas supply restoration works. This is following the Putra Heights pipeline fire incident, as well as the higher level of maintenance activities. The utility segment margin was also tighter, in line with the lower revenue.
PBT, nevertheless, declined marginally by 0.6% only, or MYR 50 million, as the impact of lower gross profit was cushioned by higher other income, including one-off income received rising from settlement with a customer. Profit for the year is MYR 1.836 billion, representing a decline of 4.5%, or MYR 88 million. The larger decline at the bottom line was mainly due to higher tax expenses following the non-recurrent of the once-off investment tax allowance recognized in the prior year. EBITDA marginally higher by 0.6% or MYR 21 million, albeit a lower PBT mainly due to higher depreciation expenses during the year. Earnings per share decreased by 5.9%. That is reflecting lower profit attributable to shareholders of the company. Board of directors has approved a fourth interim dividend of MYR 0.22 per ordinary share. This is amounting to MYR 435 million in respect of the financial year ended 31st December 2025.
PGB remain disciplined in delivering our portfolio of growth projects, in line with our long-term strategy to strengthen operational excellence and deliver sustainable value creation. Key projects have achieved financial investment decision, such as our fiber optic infrastructure projects and the 120 MW power plant in Labuan. Those projects are progressing well within our mitigation measures. We also achieved a key milestone at Pengerang, with the third LNG storage tank project reaching commercial operation in August 2025. Overall, this outcome reflects our continued focus on execution discipline and strong project governance. On 1st October 2025, PGB announced its proposed internal reorganization. Under which, the group will streamline its core operations by transferring the asset, liabilities, and activities of its gas transportation, gas processing, and utility businesses into three new wholly-owned subsidiaries.
This restructuring aims to provide a clear distinction between regulated and non-regulated segments, enabling a sharper operational focus and supporting the group's medium to long-term strategic direction. Court convened meeting, CCM, was subsequently held on 12th February 2026, where the resolution was tabled and received a successful voting outcome. [Non-English content] we work towards whole life date by end of quarter three. The government has approved PGB's revised RP3 tariff for gas transportation and regasification. This is effective from 1st January 2026 to 31st December 2028. Set under the Incentive-Based Regulation, the IBR framework, these revised tariffs reinforce supply reliability and are expected to continue driving positive contributions from the transportation and regasification segment. Wan Khairul will share further details on this in the later segment. We continue to strengthen the transparency and robustness of our disclosure in line with the FTSE4Good index series.
In 2025, we maintained our overall FTSE4Good score of 4.7, including a full score of five in the governance lens, reflecting the strength of our oversight and corporate governance practices. At the same time, our Bloomberg ESG score improved from 5.31 in 2024 to 5.36 in 2025. This signals steady progress in quality, consistency, and breadth of our ESG reporting. Ladies and gentlemen, following the Putra Heights pipeline incident on 1st April 2025, PGB responded swiftly through effective pipeline management, close coordination with government and key stakeholders, and proactive community support. Our immediate priorities were clear: the safety of people, care for affected communities, environmental protection, and security of gas supply to the nation. The affected pipeline was promptly isolated. The fire was contained on the same day, and comprehensive contingency plans were activated to stabilize operations. We also fully recognize the impact on the surrounding community.
In the immediate aftermath, PGB provided more than MYR 1.2 million in immediate monetary assistance to individuals and families experiencing total or partial property loss, complemented by MYR 2.7 million in additional cash and medical aid disbursed within the first week to address urgent needs. PGB extended support through a range of community-focused initiatives, including MYR 25 million contribution to the Ministry of Housing and Local Government or KPKT, Tabung Amanah Bencana, to facilitate house repair. This was complemented by the launch of Laman Claim and Connect to support third-party insurance claims related to home repairs and house content, as well as mental health assistance, reinforcing our commitment to long-term community recovery. Key milestone was achieved on 1st July 2025, with DOSH approved gas in for the temporary pipeline, restoring regular flow to the PGU system.
While the incident resulted in one-off costs, the overall impact was contained and manageable, allowing PGB to deliver a resilient financial year 2025 performance while continuing to advance our long-term growth agenda. As recovery efforts continue, PGB remains guided by the principle of accountability, care, and long-term responsibility, with an emphasis on restoring trust, strengthening resilience, and supporting sustainable recovery of the communities affected. We come to the details of our business and financial performance. As always, this section will be presented by Shahrul. Over to you, Shahrul.
Thank you, Encik Aziz, good morning, everyone. I will take you through the individual segment business and financial performance for quarter four 2025 and for the full-year. Before I explain about the full group performance for the year. During the year, for gas processing, the segment maintained a high reliability, consistently meeting increased sales gas demand as gas supply fully normalized from 1st July 2025. This has resulted in the gas processing achieving nearly 100% overall equipment effectiveness, maximizing performance-based incentive. For year 2025, four gas processing plants units in Kerteh and one unit of gas processing plant in Santong have successfully completed plant turnarounds in complying with the statutory requirement, resulting in further enhanced reliability.
As for the financial performance of gas processing, against the corresponding quarter four 2024, segment revenue declined marginally by 0.3% as a result of lower IGC incentive, which is in line with the lower gas price, while segment results rose by close to 20%, driven by lower operating expenses supported by optimizations efforts. Against the corresponding year 2024, segment result increased by 8.3% or MYR 66.7 million, in line with lower operating expenses. This is a resultant from the continued cost optimization initiative, including leveraging in-house digital tools such as predictive analytics on plant parameters, which helps to avoid unplanned plant interruption, hence minimizing reactive maintenance activities. Moving on to the gas transportation. As mentioned by Encik Aziz earlier, despite the Putra Heights incident on the 1st of April 2025, our pipeline network have remained largely reliable during the year.
We have worked continuously to restore the pipeline services in the affected area and have achieved gas in for the temporary bypass. The recovery and restoration works are progressing as planned, with completion targeted by end of this year. Having said that, the financial performance for gas transportation against the corresponding quarter four, and against corresponding year, FY 2024, segment revenue decreased for both quarter and full-year as a result of downward tariff adjustment, mainly due to sharing factor for prior years lower IGC in accordance with the incentive-based regulation framework by Suruhanjaya Tenaga. Segment results fell by close to 70% against the corresponding quarter and lower by 30% against the full-year following the lower revenue, coupled with higher operating expenses.
Operating costs increased due to costs incurred for the gas supply restoration works arising from the Putra Heights incident, coupled with higher level of maintenance activities, mainly for preventive maintenance and measures undertaken to address emerging operational risks, as well as higher depreciation expenses in line with increased capital expenditure, as well as higher utilities following the operationalization of new infrastructure for the southern region. Moving on to the next segment, regasification. The group's LNG regasification in Sungai Udang, Melaka, and Pengerang, Johor, sustained their strong reliability performance through the effective maintenance programs. During the year, LNG regasification in Sungai Udang completed the LNG berth maintenance, which included the replacement of marine fenders and overhaul of marine loading arms.
Against the corresponding quarter and corresponding year 2024, segment revenue grew by 6.2% or MYR 21.3 million against corresponding quarter, and 1.7% or MYR 33.3 million against corresponding year, mainly contributed by additional revenue from providing LNG storage services at Pengerang, Johor, which commenced in August 2025, as mentioned by Encik Aziz earlier. Correspondingly, segment results increased by 21.1% or MYR 37 million for the quarter, and 1.3% or MYR 7.7 million for the full-year in line with the higher revenue. While for full-year, this was partially offset by higher operating costs, primarily due to increased depreciation expenses and lease expenses arising from the new floating storage unit at Pengerang. Moving on to the utility segment. Our utilities plants registered close to 100% product delivery reliability for most of the products.
As mentioned by Aziz earlier, effective 1st July, the segment has seen unfavorable impact of the regulatory period for RP4 electricity tariff application. This unfavorable impact of the new tariff being negated by higher products volume offtake by customers, particularly for steam product, which has cushioned the impact of this new tariff. The continuous reduction of MRP has resulted in lower product prices for steam and industrial gases for the year. Nonetheless, the segment has benefited from lower operating expenses, mainly attributable by reduced fuel gas costs rising from favorable gas price movement and improved fuel efficiency coupled with optimizations of maintenance activities. With that, the financial performance for utility segment against the corresponding quarter four, 2024.
Despite reduced revenue, mainly due to downward revision of the tariff for electricity, segment results increased by 3.8% or MYR 1.8 million, following the favorable impact of lower fuel gas price under the MRP. For the quarter to quarter, average fuel gas price was lower by about 13%. Financial result against corresponding year 2024. Segment results fell by 9.2% or MYR 26 million, following lower revenue due to the lower tariff and product prices, by only partly negated by favorable impact of lower fuel gas costs following downward movement in the average fuel gas price by around 8% on year-on-year. Let's move on to the overall group financial performance. This year's group performance was underpinned by a steady operational reliability. Gas processing achieved nearly 100% OEE following successful turnarounds and normalized gas supply. Gas transportation remained dependable with swift restoration after the Putra Heights incident.
Regasification terminals sustained high reliability through preventive maintenance, while utilities delivered close to 100% product delivery reliability despite lower tariff and product prices. Overall, performance remained resilient for the year and is expected to be the same moving forward. Based on that, against the corresponding quarter four 2024 and corresponding year 2024, the group revenue for the quarter of MYR 1.57 billion decreased slightly by 2.8% or MYR 44.7 million. While full-year revenue of MYR 6.373 billion decreased by 2.5% or MYR 164.4 million, mainly from utility segment, in line with the lower product prices and due to gas transportation segment following a downward tariff adjustment arising from sharing factor for prior years lower IGC price. This impacts were partly cushioned by higher revenue from providing energy storage services at Pengerang, Johor, which commenced in August 2025.
Gross profit declined by 4.3% or MYR 3.8 million against corresponding quarter, and 5.7% or MYR 129.7 million against corresponding year, primarily due to lower margins in the gas transportation segment, reflecting the reduced revenue coupled with costs incurred for gas supply restoration works following Putra Heights pipeline incident, and higher level of maintenance activities, mainly for preventive maintenance as well as measures undertaken to address emerging operational risks. Utility segment margins were also tighter in line with the lower revenue. Profit for the quarter decreased by 5.3% or MYR 22 million, and full-year profit of MYR 1.36 billion, representing a decline of 4.5% or MYR 87.1 million. This is in line with the lower gross profit, coupled with higher tax expenses in the current period as a result of the non-recurrence of one-off ITA, which was recognized in the corresponding period.
This impact is partly cushioned by higher other income, which includes the one-off income received rising from settlement with a customer, as well as we registered higher share of profit from our associates and also joint ventures. Moving on to our balance sheet. The group's total assets of MYR 119.8 billion was higher by 5.6% or MYR 1.059 billion, driven by higher property, plant, and equipment from higher capital expenditure incurred during the year. We successfully completed our RP2 commitment, and we have a good progress on our key growth projects, namely the fiber optic infrastructure project, the 110 MW power plant in Labuan, as LNG storage tank project in Pengerang, as mentioned by Encik Aziz earlier. It's a good CapEx spending during the year for PGB group of companies.
Total liabilities increased by 13.1% or MYR 590.4 million due to recognition of a new lease liability in respect of the floating storage unit in Pengerang and lease modification from the prepayment of remaining fixed charges under jetty usage agreement for Pengerang LNG. Cash balance were moderated following higher CapEx spending during the year. Liquidity remains at healthy level, enabling dividends to be sustained and underpinned by our robust earning and disciplined capital management. As mentioned by Encik Aziz earlier, the board has approved the fourth interim dividend of MYR 0.22 per ordinary share, payable on 24th of March 2026, amounting to MYR 435.3 million for the financial year ending 31st December 2025. This demonstrates our commitment to ensure a sustained level of return to the shareholders despite the business operating conditions. That is all from me.
Encik Wan Khairul will share with all of us on the recently announced RP3 tariff. Over to you, Encik Wan.
Thank you, Encik Shahrul. Good morning, everyone. I will take you through the key highlights of the newly approved Regulatory Period 3 tariff for our gas transportation and regasification business. Following the government decision on the RP3, PGB is expected to continue contributing positive earnings, supported by its regulated business segment. This outlook is underpinned by growth in the regulated asset base, driven by the successful execution of RP2 project. Under the approved RP3 tariff framework, higher operating costs have been recognized by Suruhanjaya Tenaga, including costs associated with a new asset. In overall, return from our regulated business remain market competitive and at par with comparable infrastructure-based companies.
As part of the RP3 tariff approval, Suruhanjaya Tenaga had also introduced new mechanism, which is unpredictable OpEx and CapEx, to address risks arising from uncertain and unforeseen costs, such as costs resulting from the new government directive and other factors beyond PGB control. For example, if there is any electricity price adjustment, this will be considered under unpredictable OpEx. Concurrently, PGB continue to pursue efficiency initiative on capital investment, which is aligned with CapEx efficiency carryover mechanism, while continuing sustainability focus effort that support long-term operational resilience and financial sustainability. All right. Let me start with PGU. The approved base gas transportation tariff is MYR 1.196 per gigajoule per day. Additionally, a tariff of MYR 0.413 per gigajoule per day has been approved for high-pressure gas delivery to Singapore.
The successful execution of RP2 project, which increased the regulated asset base, PGB will continue to invest in the PGU system under RP3 to sustain pipeline system safety, integrity, and reliability. Key investment include the rejuvenation of the PGU pipeline system and completion of the Jeram Compressor project, supporting growing gas demand in the northern region. To support high transportation volume, additional OpEx allowance have been approved Primarily reflecting the forecast increase in operating costs and electricity consumption required to operate both existing and the new compressor facilities located in Kluang, Johor, and Jeram, Selangor. As continuation from RP2, the 100% cost pass-through mechanism for the Internal Gas Consumption price will remain in place under the RP3. This reinforce tariff stability within the IBR framework and protect earning from gas price volatility.
Moving on to RGTSU, the government has approved the base regasification tariff of MYR 3.542 per gigajoule per day. The RP3 tariff is determined based on the assumptions that capacity utilization will be maximized at up to 100% capacity, driven by higher forecast gas demand in Peninsular Malaysia. The tariff incorporate additional CapEx investment focused on system reliability and asset rejuvenation, ensuring the regas terminal remain robust and fit for long-term operation. These investments support safe and efficient operation of RGTSU. Anchored on forward-looking assumptions, OpEx allowance have been approved to reflect higher utility costs arising from the forecast increase in send-out volume. The OpEx allowance also enable RGTSU to meet regulatory compliance while upholding our contractual obligation in providing regasification services. Similar to PGU, gas price risk at RGTSU is fully mitigated through 100% cost pass-through mechanism, providing further stability to earning.
Lastly, the government had approved a base regasification tariff for RGTP of MYR 3.142 per gigajoule per day. Similar to RGTSU, capacity utilization is also expected to maximize at up to maximum capacity in RP3, consistent with higher forecast gas demand in Peninsular Malaysia. Tariff is derived in accordance with the principle of cost reflectivity, prudency, and efficiency within the IBR framework. Under the RP3, the tariff provide for additional CapEx investment to sustain the integrity and reliability of the regasification terminal, alongside routine scheduled maintenance CapEx to ensure compliance with regulatory requirements. OpEx allowance for RGTP have been approved to reflect costs associated with increased send-out volume, ensuring that efficient operating costs are appropriately recognized within the tariff framework. In line with PGU and RGTSU, gas price risk is mitigated through 100% cost pass-through mechanism as well.
In summary, the regulated business will continue to contribute positively to the group earning. That concludes my sharing. Now hand over back to Encik Aziz.
Thank you, Wan Khairul. With that briefing, I hope we have given you better clarity on RP3, which is going to be in effect for the next three years. Let's move touch into bit on the outlook. Ladies and gentlemen, as our results continue to reflect our unwavering commitment to operational excellence. Alhamdulillah, we remain well-positioned to sustain a healthy and stable performance throughout 2026. 2025 and 2026, underpinned by resilient operations and disciplined execution. I touch on Putra Heights. Following the Putra Heights incident, in line with our focus on operational excellence, we have further strengthened our focus on safe, reliable, and efficient operations. We have reinforced risk-informed control, asset integrity assurance, and delivery discipline to safeguard the integrity of our pipeline network and ensure long-term business resilience. Safety and project delivery excellence remain fundamental as we continue to enhance operational robustness and stakeholders' confidence.
As part of this continued drive for operational excellence, I've mentioned early on, our internal reorganization will go live in Q3 2026. This will strengthen our end-to-end operational visibility, performance monitoring, and control across our operations. Internal reorganization will support more disciplined execution, faster decision-making, and stronger risk oversight, reinforcing consistency and reliability across the group. At the same time, we are advancing our core business expansion. This is very much to support Malaysia energy security and energy transition agenda, progressing infrastructure development to meet the rising demand, also pursuing opportunities under RMK13 and NETR, including potential regasification infrastructure and power plants. Beyond our core businesses, we are selectively pursuing adjacent and step-up opportunity. The fiber network that we are building is an example of adjacent and step-up opportunity, by leveraging on our existing asset.
In the case of that project, leveraging on the right of way that we have across Peninsular Malaysia, the capabilities to diversify revenue streams and deliver sustainable long-term value for our stakeholders. That's all from me. I shall now pass over to Suri. Thank you.
Thank you, Encik Aziz, Encik Shahrul, and Encik Wan Khairul. We have now come to the question and answer session. Please be reminded to continue to obey the session rule, where everyone should be on mute to ask a question. Please press the Raise Hand button and we will open the microphone for the selected participant. You may also type your question in the chat box and we will read it out loud for you. Let's start. There's the first question here. Encik Wan Khairul?
No.
Sorry. Sorry. First question from Isaac. Yes, Isaac?
Hi. Good morning, everyone. I have two, three questions, please. First is, in terms of the maintenance cost outlook for 2026 and onwards, how should we look at it? Should we look at fourth quarter was a one-off, preventive maintenance is high, or that should be the new base for going forward? In particular, that's from the gas transport segment. Question number two is that, how much is the CapEx under the RP3 and how does it compare to RP2? The last question is that, can you remind us what is the reserve volume for the gas transportation under the RP2 again? Thank you. Three question.
Thank you, Isaac. I think on the maintenance outlook, you should look at the full-year trend to look at what is the trend, rather than quarter by quarter. Sometimes, as you know, there are constraints within a certain quarter leading to lower spending or sometime turnaround. You have in different quarters, the spending is higher. You should look at full-year numbers as a guide. RP3 versus RP2, I think in general, there is an increase in tariff, right? In general. I think you can make the comparison. The numbers are available in various platforms. Of course, some are higher, some are lower. But in general, for us, there is an average increase, right? Step one is the volume.
Is the volume part.
You mean the capacity, probably. The shipper continue to reserve the same capacity as per RP2, yeah. Remember, RP period is a decision by government when it comes to tariff and the IBR regime. We do have a long-term contract with the shipper. We have, I think, announced this quite a few times. In the case of pipeline, usually at mid-2030s, yeah. And the regas, mid-2030s, and one of the regas probably until 2040. Okay, Isaac?
All right. Sorry, I just want to just summarize this in a bit. Can I assume that any increase in the maintenance OpEx during this period has been captured and will be compensated by the higher tariff under the RP3 already? Is all taken into consideration?
Oh, yeah. Remember that under the IBR, the basis is the middle year of the RP2. Whatever the numbers will be captured, and then will be reflected in the new RP. As far as CapEx, once you spend, it will be translated into the RAB, yeah.
Okay. Thank you.
Thank you, Isaac. Next in line is Fung.
Hi. Good morning, everyone. Thank you so much for the call. Couple of questions from me. Firstly, I just want to go back to the question on the maintenance cost, right? High maintenance cost for gas transportation in the fourth quarter. You mentioned preventive maintenance and undertaking some measures, right, to address emerging operational risk. Can I understand whether this is related still to the Putra Heights incident, or is the maintenance measures that you took related to something else? Was it a planned maintenance, or was it an unpredicted or unplanned maintenance? That's question number one. Then, on to the second question, in relation to the RP3 tariffs. I note the substantial increase in the PGU tariffs. You also mentioned that it's also reflecting or factoring in the higher costs that is to be expected in RP3.
Can I understand what would be the net impact to your earnings from this increase in the PGU tariff? Do you expect it to boost earnings, or would it be more of a neutral impact with the higher tariffs offsetting higher costs? Thirdly, in terms of the regulated return for RP3, I am not sure whether you share this number. If you could, it would be good if we can hear what the regulated return is for RP3. Or if you cannot disclose it, has it risen or fallen compared to RP2? Those are my questions. Thank you.
Thank you, Fung. For the maintenance costs for fourth quarter related to PGU, it actually covers both the normal maintenance as well as, if you keep on reading on the Putra Heights incident, owing to new risks that we have learned from the incident, we did some spending to take into consideration the new risk. To answer your question, the maintenance cost is actually covering both normal and some portion dedicated to Putra Heights enhancement. The second question on earning RP3. The earning is comparable to RP2. Wan Khairul mentioned, still going to give us positive impact to the company. Regulated return. Typically, we did not announce the return that the government has given. What I can tell you is that it is comparable to peers in the industry, basically, those that are in the utility infrastructure business, regulated business.
Okay, Encik Aziz, if I can just quickly follow up on the gas transportation earnings outlook under RP3. Can you guide us a little bit on what you expect in terms of the EBITDA or EBIT margin for gas transportation in FY 2026? Also just going back to what you mentioned just now about the maintenance cost, having two parts to it. The second part, which is, I think a little bit less of a planned maintenance related more to the Putra Heights incident. Is that going to be compensated back to PETRONAS Gas from the IBR framework?
Okay, two questions. I take the second question first. As Wan K. mentioned, in the new regime, there will be unpredictable OpEx and CapEx. If the cost is not part of what has been approved under RP3, it will be addressed together with ST on unpredictable CapEx or OpEx. Yeah. That's how we're going to handle this issue. The second part, again, on EBITDA, whatever. Typically, you can look from the announcement. What I can say, the impact from RP3 is comparable to what you have been seeing on RP2. Yeah. With these two questions, yeah.
Okay. Thank you so much, Encik Aziz.
Thank you.
Thank you .
Daniel? Not Daniel.
Fung. Sorry. Thank you, Fung. The next one we have on the line is Daniel.
Morning, guys. Can you hear me?
Yes.
Yes, Daniel.
I just want to kind of sum up just now the questions. Few questions. The question is on the higher maintenance CapEx, all this happened during the fourth quarter. Just want to double-check again, this higher OpEx and maintenance CapEx, this was being done during the fourth quarter of 2025. This one will actually get compensated under the RP3, is it, or no?
As I mentioned just now-
Blank line
The total CapEx in quarter four is not only at PGU but also at other assets. Whatever the CapEx that we spend on PGU, if it's not in RP2, it's not in RP3, then there is always the unpredictable CapEx and OpEx provision that we will be talking to ST.
That means the new tariff under the RP3 has already taken into account of whatever being spent for the fourth quarter of 2026.
Yeah.
The unpredictable side. That's the plan one, yeah.
For the plan one.
Yes.
Yeah.
For the unplanned one, under the RP2, for example, for Putra Heights and all the preventive measures that was being done on the fourth quarter is just considered unpredictable. This one will be considered under RP3?
Yes. It's under the provision of unpredictable.
Yeah.
What I can say, the big chunk is still under RP2.
Okay.
Budget.
Big chunk still under RP2.
Yes.
All right. Can I check, if we do a numbers, can we easily assume that in the fourth quarter, this additional chunk of OpEx easily could come up to MYR 60 million-MYR 70 million additional compared to the third quarter or compared to previous quarters or compared to fourth quarter last year?
I don't think so, because, again, you should look at full-year. Again, our maintenance activities has many factors. Sometimes weather also will impact our maintenance activities, but what we plan for the full-year is a better guidance for you.
Yeah. Because what we are looking at, your quarterly numbers seems to be stable on the first nine months, just like your fourth quarter suddenly everything mark up, but we don't see a substantial things that have changed, I mean, environments that have changed.
Okay, maybe my CFO also can chip in.
I think I may help. I don't know. I think as mentioned, Encik Aziz, they're both planned and unplanned maintenance activities undertaken in quarter four, and I think your question is particular for gas transportation. I think the planned one, sometime during the year, there's resurfacing activities, but it's a planned activities. It can happen in any of the quarter. Sometimes it's being planned in early quarter, but the execution is a bit later, depending on the situation at the plant, whether there's a window for us to undertake the maintenance activities.
I think a certain portion of what happened in Q4 is what we call is one-off or is unplanned. That was not expected to happen in every quarter four. If that may help, Daniel.
How much is this unplanned CapEx, so OpEx being spent in the fourth quarter?
I think around MYR 15 million or so for quarter four.
15?
15. Yeah.
15.
Yeah.
Only 15. Okay. My second question is on the PETRONAS Gas Processing incentive for the year. How much do you recognize for this year? Last year was around MYR 150 million, I remember. This year, how much was it, IGC?
This year number Last year you were saying MYR 100 million?
MYR 150 million.
MYR 150 million.
Yeah. Last year.
I think it's about the same. Just slightly lower than MYR 150 million.
Similar. I see.
It's mainly because of the gas price movement, because it's a function of the price and also volume. I think volume-wise, it's almost similar to last year. What's changed during 2025 is the lower MRP price because the incentive also pegged to gas price.
I see. Maybe allow me for another two quick questions. The CapEx spending and the OpEx spending that is under RP2 and RP3, is it based on US dollar or based on Ringgit Malaysia?
What we submit to ST, what's being approved is all Ringgit-based.
All in Ringgit-based. When you actually incur the actual CapEx spending will be in U.S. dollar, correct?
Certain portion is, not everything. It's not something new. Even before being regulated by ST, we do have cost component in U.S. dollar. When we submit for RP, there's certain assumptions we put in the submission. We also do the necessary mitigation through hedging where necessary, where relevant. So far, it hasn't caused much impact to us in terms of the currency.
Because we have seen Ringgit appreciated against U.S. dollar quite substantially during the first part of this year. When you submit during last year.
Yeah
the Ringgit will have changed substantially already by almost 10%.
Yeah.
I'm sure you're trying to guide us that although it's only appreciated by 10%, it will not really give you guys improvement in margin or you guys already fully hedged for the full portion of this cost?
No, it will not have a significant impact. It eased the cost a bit, but not as significant because the cost component in US dollar also not as significant.
I see. Got this.
Mostly in majority the cost is in Ringgit.
I see. Maybe my last question is, just now you mentioned under RP3, 100% of the cost of the gas Internal gas consumption, IGC, it will be passed through to the off sector, right? Is this something new, or I thought this is already implemented under the RP2 as well?
Yeah. This is something which is already there. I just further emphasize that it will be continued during the RP3.
It will be continued. It's not something new, but it's already implemented in RP2.
Yeah. It's not something new. Yeah.
Okay. Cool. Thank you very much. That's all from me.
Thank you, Daniel. Okay. We have two more people here, I think I'm going to give it to Darmini first since I think it's already posed. Darmini?
Thanks, Suri. Thanks everyone for this session. Just two questions from me. First one is just going back again to gas transportation. If I could ask the question a different way. In 4Q, gross profit from gas transportation fell sharply. It was down to about MYR 35 million quarter. If that preventive maintenance or the one-off related maintenance activity did not happen, what would the quarterly profit run rate be, gas transportation? Is the MYR 120 million range fair moving? My second question is, just going back to the currency question. Approximately how much of your CapEx and OpEx is linked to the US dollar? Just a rough estimate. Thank you.
Darmini, your first question, the gross profit for GT, right? Can you repeat again? You were saying MYR 120 million. You were referring to what?
Okay. No. It's MYR 35 million for the fourth quarter, the prior quarter it was MYR 117 million, before that it was about MYR 119 million. That's the sort of run rate prior two quarters.
Yeah. Okay.
Can we assume that that is the regular run rate?
We do
Assuming no such maintenance?
Okay. I think if you compare without the one-off, I mentioned just now the one-off was MYR 50 million, but what you see in the reduction of gross profit for GT is not just maintenance activities. There is also higher depreciation expenditure that we incur in quarter. Once we completed the project, we capitalized quarter three of the year. The depreciation will actually kicks in quarter four. Moving forward, depreciation will be part of the yearly expenditure, of which already considered under the new RP tariff. I would say the increase in depreciation in quarter four will be normalized because it will be covered through the earning from SP.
Okay. It is suffice to say that it will be lower than the second and third quarter run rates, but definitely significantly higher from
Yeah. The second question on the USD exposure. I think for both OpEx and CapEx, the exposure to the U.S. dollar is less than 5% of the total CapEx and also OpEx.
Okay. Thank you very much. That is very clear.
Yeah.
Okay. Thank you, Darmini. I think we'll take one last question, from Tan.
Hi. Can you hear me?
Yeah.
Yeah. Can I ask, is the 100 MW Kimanis plant on track for completion this quarter?
Wait, can you repeat your question?
Is the 100 MW Kimanis plant on track for completion this quarter?
Based on current progress, we are looking at June. Which is based on approved PPA timeline.
Okay. My second question is, are there any new projects within the company we should be aware of that's in the pipeline?
We will make an announcement if we reach FID stage. Yeah. Rest assured, we are working on opportunities. There's always a growth agenda that we are pursuing, as I mentioned in the outlook, along those area of focus. So we hope that we can reach FID for some of these and make the necessary announcement as the time comes. Yeah.
Okay. Thank you.
Okay. Thank you, Tan. Thank you so much for your active participation and engagement. That's all the time we have for today. We hope to see you again in the next first quarter's earnings briefing. Thank you.