Gas Malaysia Earnings Set to Weaken Amid Lower Natural Gas Prices

Gas Malaysia Bhd (KL:GASMSIA) is expected to report weaker second-quarter earnings due to lower natural gas prices, higher overheads, and marginally lower returns on regulated assets. According to an earnings preview by UOB Kay Hian, January-June earnings may decline 10% compared to the first half of 2025.

The boost from the Middle East geopolitical conflict is expected to come later, with higher natural gas prices only being captured in the fourth quarter onwards. This suggests a strong finish for 2026 and spillover of higher prices into 2027. Natural gas sold domestically is set based on the Malaysia Reference Price that benchmarks against the value of exports.

Brent, the global benchmark for crude oil, has surged nearly 20% in the first six months of 2026 amid the US-Iran war that has choked off a key global supply flowing through the Strait of Hormuz. Prices of liquefied natural gas in Asia have surged 67% over the same period.

UOB Kay Hian estimates that natural gas prices, per metric million British thermal unit, will jump to as high as RM50 in the fourth quarter from RM34 in the first nine months of 2026. The research house is maintaining its 'hold' call on Gas Malaysia with a target price of RM6.00.