TNB POSTS RM2.16в NET PROFIT IN Q1
Favourable foreign exchange translation, stronger ringgit main contributors to results
TENAGA Nasional Bhd’s (TNB) operating profit of RM2.34 billion for the first quarter (Q1) ended December 2017 was similar to the corresponding period in 2016.
Operating expenses (opex) rose 6.3 per cent to RM9.66 billion compared with RM9.09 billion in the same period a year ago.
The higher opex was mainly due to generation cost from rising fuel cost.
However, through the effective implementation of Imbalanced Cost Pass through (ICPT) mechanism, TNB remained neutral from any fluctuations in fuel prices.
Net profit rose to RM2.16 billion from RM1.79 billion in the same period last year, of which 45 per cent came from regulated business.
TNB president and chief executive officer Datuk Seri Ir Azman Mohd said favourable foreign exchange translation, boosted by the strengthening ringgit, contributed to the higher net profit.
“This indicates positive macroeconomic development in the country, which benefits TNB in terms of electricity demand.
“More importantly, the stability of the group earnings was underpinned by the effective implementation of ICPT mechanism under the Incentive Based Regulation (IBR) framework,” he said in a statement yesterday.
The profit stability was crucial to ensure TNB could continuously invest in the nation’s infrastructure to ensure system efficiency, security and reliability, he added.
The performance would benefit shareholders in future dividend payouts as well as capital gains, said Azman.
TNB also invested substantially in capital expenditure (capex) to match the nation’s energy capacity requirement.
Currently, there are three generation projects with almost 3,500 megawatt capacities due to be commissioned from this year to 2020.
These projects represent 70.9 per cent of the group’s total capex investment of RM3.71 billion in Q1.
The group’s total asset base rose to RM146.10 billion as at November 30 last year.
Electricity demand growth in Peninsular Malaysia for the period was at 1.2 per cent, mainly by the upward trend in the industrial sector since the fourth quarter of financial year ended August 2017.
As for the economic outlook, Bank Negara Malaysia, in its Economic and Financial Developments In Malaysia In The Third Quarter of 2017 report, indicated that given the continued strong performance in the third quarter, the economy was on course to register growth that was close to the upper range of the official projection of between 5.2 and 5.7 per cent last year.
Therefore, the national utility expects electricity growth demand and stable earnings in line with country’s growth projections.