KUALA LUMPUR (Feb 27): Petronas Gas Bhd (PetGas) rose as much as 24 sen or 1.36% after the natural gas distribution company proposed a dividend of 19 sen per share in conjunction with its fourth-quarter results announcement.

PetGas shares rose to their highest so far today at RM18. At 11.10am, the stock was traded at RM17.90 with some 211,300 shares crossing hands. PetGas was among Bursa Malaysia top gainers.

Yesterday, PetGas said the proposed fourth quarter ended Dec 31, 2017 (4QFY17) dividend of 19 sen per share brings its full-year dividend payout to 66 sen, as opposed to 62 sen in FY16.

PetGas's net profit for 4QFY17 rose 5% to RM486.7 million from RM465.6 million a year earlier on contribution from the group's new liquefied natural gas regasification terminal in Pengerang, Johor, which commenced operations during the quarter.

Quarterly revenue grew 13% to RM1.3 billion in 4QFY17 from RM1.15 billion, supported by higher revenue from gas processing and utilities segments on the back of higher performance-based structure income, and favourable selling price, respectively.

For FY17, PetGas said net profit rose to RM1.79 billion from RM1.74 billion a year earlier, while revenue improved to RM4.81 billion from RM4.56 billion.

Today, CIMB Investment Bank Bhd analyst Ngo Siew Teng said PetGas is still in discussions with Suruhanjaya Tenaga on the framework and quantum of the tariff beyond 2018.

"In our view, the current tariff under the Third Party Access (TPA) system may be lowered in the next review period as other companies subject to incentive-based regulation (IBR) are only allowed to earn 7.5% to 8% return on capital.

"While PetGas's earnings profile should be relatively stable in FY18, we see earnings risk beyond 2018 if there is any tariff revision under the TPA," she said adding that CIMB lowered its PetGas share target price to RM18.10 with an unchanged "hold" call.