Credit Suisse - 9M09 net profit better than expected due to foreign exchange gain

● Perusahaan Gas Negara (PGAS) reported net profit of Rp4.4 tn in 9M09, up 145% YoY. This is better than market expectation due to a foreign exchange gain on the appreciation of the rupiah.

● Sales revenue rose 50% YoY to Rp13.5 tn in 9M09. Operating profit was Rp5.9 tn in 9M09, up 68% YoY. This is in line with our expectation. The company recorded Rp911 bn of forex gain and a Rp355 bn loss on change in the fair value of derivatives in 9M09. Excluding these non operating gains and losses, we estimate core net income of Rp3.6 tn, up 77% YoY.

● Transmission volume was 763mmcfd (million cubic feet per day) in 9M09, up 2% YoY. Distribution volume rose 37% YoY to 776mmcfd, higher than our expectation. This means that in 3Q09, distribution volume was 815mmcfd, up 3% QoQ.

● We believe PGAS will continue to show distribution volume growth and have strong operating cash flow. We retain our OUTPERFORM rating on PGAS.