TNB denies listing power generation unit


TENAGA Nasional Bhd (TNB) is not laying any groundwork for a potential listing of its generation assets as it’s focused on operational efficiency at the moment.

The power utility, in a filing to the stock exchange yesterday, stated it will continue to explore opportunities to further enhance the shareholder’s value and will make the necessary announcement if there is any change to this.

In line with its strategic transformation plan called Reimagining TNB, the national utility giant clarified it has completed the reorganisation of TNB Power Generation Sdn Bhd on Oct 1, 2020.

According to TNB, the transformation plan as per its shareholders’ mandate was approved in February 2020.

“This exercise aims to group together and corporatise divisions in TNB as wholly owned subsidiaries of TNB, for increased focus, efficiency and transparency,” it added.

Bloomberg on Monday reported TNB was considering listing its power generation business on the local stock exchange next year following a corporate reorganisation exercise.

Quoting people familiar with the matter, Bloomberg reported TNB was working with an advisor on its planned restructuring, and aimed to finish the process as soon as the first half of next year.

TNB’s share price jumped 14 sen or 1.25% to RM11.34 yesterday, which values the company at about RM64.69 billion.

TNB owns 47 plants in Peninsular Malaysia with a total domestic generating capacity of 10,617MW, according to its 2019 annual report.

It also has a presence in the UK, Kuwait, Turkey, Saudi Arabia, Pakistan, India and Indonesia.

TNB’s net profit declined to RM653.3 million in the second quarter ended June 30, 2020 (2Q20), from RM1.11 billion recorded in the same period last year.

The multinational electricity company’s revenue dropped to RM10.89 billion versus RM12.87 billion previously, mainly due to drop in sales of electricity.

For the six-month period ended June 30, 2020, TNB’s revenue decreased 13.7% to RM22.5 billion.

TNB noted that this was due to a drop in the imbalance cost pass-through of RM2.3 billion and the sales of electricity of RM1.2 billion with negative growth of 8.1%, owing largely to the declines in certain customer segments, which were affected by the Covid-19 outbreak.

Operating profit fell 11.6% year-on-year to RM4 billion. Given the ongoing Covid-19 pandemic and the uncertainties in the economic environment, TNB foresees prolonged challenges on the group’s prospect for the financial year ending Dec 31, 2020.

Read our earlier report here