TNB posts RM164m net profit in Q4

By Jeeva ArulampalamPublished: 2009/10/27

National utility Tenaga Nasional Bhd (TNB) (5347) turned in a fourth-quarter net profit of RM164.3 million, after sustaining a loss of RM282.9 million a year ago.


The better results was attributed to earlier tariff adjustments and lower foreign exchange (forex) losses.

For the three-month period ended August 31 2009, TNB's revenue grew 12 per cent to RM7.5 billion from a year ago.

The group recorded an unrealised forex loss of RM244.3 million as the ringgit weakened against the Japanese yen and the US dollar, to which the group has exposure to.

TNB president and chief executive officer Datuk Seri Che Khalib Mohamad Noh expects earnings for the current financial year to be better, due to growth in electricity demand, stabilising coal prices and lower forex losses.
"From June 2009 till now, demand for electricity has been above the 2008 figures. Our forecast for demand growth next year will be in the region of three per cent," Che Khalib told a media and analyst briefing in Kuala Lumpur yesterday.

The rolling average of coal prices will also be lower during this current financial year. For its full year ended August 31 2009, the average coal prices incurred was US$90.2 (RM305) per tonne.

TNB's net profit dropped 64.6 per cent to RM917.9 million in the financial year just ended, due to slower demand growth, increased operating expenses due to higher fuel costs and payments to independent power producers.

The group was also impacted with a forex loss of RM1.18 billion, of which 74 per cent was due to its exposure to Japanese yen loans.

TNB, however, recorded a 16.3 per cent growth in revenue to RM28.79 billion due to tariff adjustments in July 2008 and March this year.

TNB has proposed a dividend of 10 sen per share and tax-exempt dividend of 2.3 sen per share.

Meanwhile, Che Khalib clarified that the RM5 billion to be spent by TNB announced under the 2010 Budget, was part of its yearly capital expenditure (capex).

"It's the usual RM4 billion to RM5 billion capex that we spend on an annual basis. Last year, we spent about RM4.4 billion group-wide," he said.

The capex will be used to implement electricity generation, transmission and distribution projects in 2010 as well as for works on the hydroelectric projects in Hulu Terengganu and Ulu Jelai, Pahang.

Che Khalib said that the tender for Hulu Terengganu has been closed and results would be released by the first quarter of 2010.

On a possible tariff hike, he said the outcome is dependent on the government's next review due in December, which could lead to an implementation in January next year.