TNB records net profit of RM3.7b for FY18

For FY18, revenue reached RM50b, allowing it to deliver a net profit of RM3.7b, or 65.6 sen EPS


Tenaga Nasional Bhd (TNB) recorded a net profit of RM3.72 billion for the financial year 2018 (FY18), about a 42% increase, as revenues jumped during the period.

However, the power company recorded a net loss of RM134.3 million for the October-December 2018 period, largely due to lower revenue, higher finance costs, foreign exchange (forex) translation loss and provision for taxation.

For FY18, revenue reached RM50.4 billion, allowing it to deliver a net profit of RM3.7 billion or 65.6 sen earnings per share (EPS). Its board has proposed a final dividend of 23 sen per share amounting to RM1.3 billion.

TNB president and CEO Datuk Seri Azman Mohd said the power utility has to reinvest heavily into the reliability and sustainability of the national grid as promoted by the incentive-based regulation (IBR).

“We intend to forge ahead with our strategic plan that is aligned towards creating value for customers, while supporting the government’s push towards Malaysia Energy Supply Industry 2.0 (MESI 2.0),” he said in a statement yesterday.

TNB noted returns on the transmission and distribution businesses amounted to RM3.71 billion for FY18.

The electricity demand growth and performance of the group is expected to remain stable for FY19, given that the private sector demand is the main driver for economic growth.

TNB in a statement said group earnings before interest, tax, depreciation and amortisation, however, was lower at RM13.37 billion due to the lower allowable return of 7.3% under IBR Regulatory Period 2 (RP2) (2018-2020) compared to 7.5% in RP1 (2014-2017).

Under RP2, the regulator introduced a revenue cap for the distribution network business and TNB has returned RM639 million to the consumers for 2018. One-off cost of impairments to the group’s investments, in addition to substantial forex translation losses of RM390 million due to the weakening of ringgit, contributed to higher operating expenses, TNB said.

TNB said a total of RM11.82 billion in capital expenditure was incurred in FY18 for maintaining, improving and modernising the power infrastructure to keep pace with the growing electricity demand, as well accommodate the growth of renewable energy (RE) in the country.

The company has increased its RE generation capacity to 73.2MW through a 50MW large-scale solarproject in Mukim Tanjung 12, Sepang, in addition to a few joint ventures in biomass and biogas power stations.

TNB’s most recent venture is through its RE subsidiary, GSPARX Sdn Bhd, where the company offers self-generation financing packages for solar photovoltaic panels for commercial, industrial and residential customers, it said.

TNB chairman Tan Sri Leo Moggie said the board has approved a 56% dividend payout ratio from the group’s adjusted profit after tax and minority interests of RM5.42 billion.

“This translates to a total of 53.27 sen per share for FY18, of which 23 sen per share will be distributed as the final single-tier dividend,” he said.