Union Gas has reported revenue of $68.3 million for 1HFY2022, up 11.6%, due to higher prices.
However, the company says it did not pass on higher costs incurred to its customers in a bid to retain customers and gain market share.
As such, earnings for the same period was down 83% y-o-y to $2.4 million.
“The operating environment has become very challenging amidst rising costs and recessionary concerns,” says executive director and CEO Teo Hark Piang.
“Despite higher fuel prices, we chose not to pass on the full increase in costs to our customers but kept prices at a level that was sustainable for both sides.
“This affected our profitability in 1H2022, but it presented an opportunity for us to gain market share and retain customers. We are also mindful that from a longer-term perspective, our customers’ performance will ultimately have an impact on us and therefore it is in our interest to offer them some support,” says Teo.
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The company plans to pay an interim dividend of 0.2 cent per share, equivalent to a payout ratio of 26% of its 1HFY2022 earnings.
The company is optimistic that its industry prospects remain positive due to the essential nature of its business as well as the potential to further exploit opportunities within the LPG supply chain of which it has full control ranging from procurement to retailing.
The company says remains on the lookout for further diversification and strategic opportunities to expand into complementary businesses both locally and overseas.
Union Gas shares closed at 67 cents, down 1.47%.
