Union Gas - DBS Research 2023-02-28: Profit Margins Could Rebound

Union Gas - Profit Margins Could Rebound

  • Union Gas (SGX:1F2)'s FY22 revenue and earnings were in line with expectations. FY22 revenue reached S$135m (+10% y-o-y) with all segments i.e., LPG, natural gas and diesel witnessing growth.
  • FY22 gross margins moderated to 26.1% (versus 33.8% in FY21) on the back of higher material costs arising from higher international fuel prices, which were well anticipated. This subsequently led to a decline in Union Gas’s FY22 net profit margin to 3.9% (versus 12.1% in FY21).
  • - Read this at SGinvestors.io -

Dividend payout was below expectations.

  • Union Gas has proposed a final dividend of S$0.003 per share. Including the interim dividend of 0.2 cents, this brings FY22 dividend to S$0.005 (FY21: S$0.018), which translates into a FY22 dividend payout ratio of 30% (FY21: 38%). See Union Gas's dividend dates.
  • - Read this at SGinvestors.io -
  • Going forward, we have revised our FY23F/24F dividend payout ratios to ~ 30% (versus previous assumption of ~50%) which leads to FY23F/24F dividend of 0.6/1.0 cents (versus previous estimate of 1.0/1.6 cents), and translates into FY23F/24F dividend yield of 1.2%/2.1%.

Some signs of improving gross margins.

  • Read more at SGinvestors.io.

Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.

Elizabelle PANG DBS Group Research | Pei Hwa HO DBS Research | https://www.dbs.com/insightsdirect/ 2023-02-28

Previous report by DBS:
2022-12-05 Union Gas Holdings - Ready, Gas Set, Go!.

Price targets by other brokers at Union Gas Target Prices.

Listing of research reports at Union Gas Analyst Reports.

Relevant links:
Union Gas Share Price History,
Union Gas Announcements,
Union Gas Dividends & Corporate Actions,
Union Gas News Articles


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