TNB makes higher provisions for unsettled bills

Second-quarter profit up despite setting aside more for unpaid bills

PETALING JAYA: Tenaga Nasional Bhd (TNB) says it has made higher provisions to cover for potential losses from customers who have defaulted on their electricity bills.

“The group reviews its receivables at least on a quarterly basis and with regard to electricity debtors in particular, the group makes proactive assessment for individual and collective impairments of the debtors based on the current operating environment,” it said. This, according to TNB, has led to the increased provision on electricity debtors during the first six months of its current financial year, compared to the period a year ago.

Cumulative six months provision for receivables stood at RM446mil, according to its latest quarterly financial accounts.

In a filing with Bursa Malaysia yesterday, TNB said its net profit for the second quarter ended Feb 28 increased to RM1.48bil from RM1.32bil a year ago. Revenue for the quarter, meanwhile, increased by 6.4% to RM11.16bil.

The company said it will pay an interim dividend of 17 sen a share, amounting to about RM960mil.

On its outlook for the rest of the year, TNB said it “remains cautious”, given the prospect of higher global commodity and energy pric- es and the impact of the exchange rate volatility.

The group’s performance during the first six months of the year was driven primarily by the 2.3% increase in electricity demand in Peninsular Malaysia.

Its capital expenditure during the first six months was RM4.81bil, which increased the group’s total asset base to RM137.56bil.

“TNB is committed to optimising operational efficiencies and unlocking value across the group, both in the regulated and non-regulated businesses,” president and chief executive officer Datuk Seri Azman Mohd said in the statement.

On the regulated business within the transmission and distribution segments, Azman said the group’s performance during the first half of the year was “at par” with those in developed countries.

For its non-regulated business, mainly in the generation segment which operates in a totally competitive market, Azman said TNB’s performance is very much comparable with the market leaders.

“Our generation plant availability factor or EAF registered an improvement of 0.6 percentage point at 89.9%, as compared to 89.3% recorded for August 2016,” he said.