INVESTMENT holding company TTNGL yesterday declared an after-tax profit of $6.4 million for the financial year ending December 31, 2020, which represents a fall of 95 per cent compared with 2019, when the company made $219.5 million.
TTNGL holds 29.25 per cent stake in Phoenix Park Gas Processors Ltd (PPGPL), the Point Lisas-based company that produces propane, butane and natural gasoline, mostly for export. PPGPL is majority-owned by the State-owned National Gas Company.
In a statement, TTNGL said its “lower financial performance relative to 2019 is reflective of the impact of the Covid-19 pandemic, which hit the global energy sector particularly hard.”
The company said natural gas liquid (NGL) prices, which correlate strongly with crude oil and refined product prices, were materially lower for 2020.
“TTNGL’s underlying asset PPGPL recorded average product prices and gas processing volumes which were respectively 31.1 per cent and 16.5 per cent lower than in 2019. NGL production for 2020 was 15.8 per cent lower than in 2019,” the company said.
As a result, the statement indicated that PPGPL recorded profit after tax of $116.8 million in 2020, which was a 49.5 per cent reduction when compared to $231.4 million for the corresponding 2019 period.
The company said the fall in price notwithstanding, the demand for propane, butane and natural gasoline “remained relatively steady since the onset of the pandemic.”
And it said the outlook for PPGPL and TTNGL has since improved, with several positive developments.
“In the latter half of 2020, there was an appreciable rebound in natural gas demand and prices, which is expected to continue into 2021.
“The negative impacts of lower NGL prices and NGL volumes were also mitigated by improved NGL content in the gas stream and higher price differentials recognised for the year (11.1 per cent and 3.8 per cent improvement respectively).
“Furthermore, PPGPL’s North American NGL business recorded a strong performance in 2020, and earnings from this segment are expected to continue contributing positively to PPGPL’s results in the short to medium term.”
To that end, and in keeping with its strategic plan to grow its business, “PPGPL continues to seek out new territories of operation, while strengthening its local performance through initiatives centered on sustainability.”
The improved operating performance at PPGPL in Q4 2020, which continued into Q1 2021, is being driven by improved market prices, increased volumes and increased liquid content in the natural gas supplied by NGC, and the continued management of operating costs.
Based on these positive trends, as well as the company’s results for the year ended December 31, 2020 as well as its current cash flow position, the board of directors of TTNGL announced a final dividend of $0.05 per share, which will be paid on May 12, 2021. The $0.05 dividend represents the total payout to shareholders of the company for 2020.