Qatar Gas Transport, known as Nakilat, has left analysts scratching their heads after the transporter of liquefied natural gas (LNG) posted two consecutive quarters of declines despite an improvement in rates for gas tankers.
Nakilat's first-quarter profit fell to 176.5 million rials, a decline of 6 per cent from the same period last year. Nakilat reported net income of 244m rials in last year's third quarter and 208m rials in the fourth quarter.
But LNG tanker rates have risen this year, driven by increased shipments to Japan after the earthquake and tsunami on March 11 last year deprived the country of about 90 per cent of its nuclear power.
Qatar holds 13.5 per cent of the world's proved reserves of natural gas, third behind Russia and Iran. Nakilat is the world's largest owner of LNG ships.
It has spent US$11 billion to expand its fleet to 54 wholly-owned and jointly-owned vessels, most of which are chartered on fixed, 25-year contracts with the state controlled LNG producers Qatargas and RasGas. Few of its ships are leased on spot rates.
"Nakilat's joint-venture business … has not been able to benefit from the spot shipping rate," said Saugata Sarkar, an analyst at Qatar National Bank. "We see the stock more as a steady performer than any significant growth, as all their fleet has been maxed out."
As a result, the analyst has taken a "conservative stance" on the company. He lowered his target price on Nakilat to 19.50 rials from 20.50 rials previously.
Nakilat's shares have declined 6 per cent this year versus a decline of 1.3 per cent for Qatar's QE Index. The stock fell 0.6 per cent to 16.45 rials yesterday.
Average LNG tanker rates rose to $97,630 a day last year from $43,663 in 2010, according to Fearnley LNG, a unit of Norway's second-largest shipbroker.
Daily rents will average $147,000 this year, according to estimates from six analysts surveyed by Bloomberg.
Nakilat is seen as a stable yield play. The company paid a cash dividend of 8.5 per cent, or 85 Qatari dirhams per share, last year.
* with Bloomberg News