Stronger demand from biz sector boosts TNB’s 2Q earnings 25.7% higher

The utility rewards shareholders with a RM1.3b interim dividend payout

by NUR HANANI AZMAN / pic credit:

TENAGA Nasional Bhd (TNB) stated stronger electricity demand from industrial and commercial users helped boost earnings by 25.7% to RM821.5 million for the second quarter ended June 30, 2021 (2Q21), from RM653.3 million net profit it made for the same period last year.

Revenue for the quarter rose by 14.2% year-on-year (YoY) to RM12.44 billion on increased sale of electricity as certain businesses were allowed to operate instead of facing full economic closure in the last corresponding period.

TNB president and CEO Datuk Baharin Din (picture) said the power utility recorded a 4.4% demand growth in the first half of the year (1H21), in tandem with the recovery registered in the industrial sector.

“Towards the end of the 2Q, there was a slowdown in the economy resulting from the re-imposition of stricter containment measures nationwide due to the resurgence of Covid-19 cases.

“The group will continue to take prudent measures in terms of its operational and financial requirements to ensure it remains resilient,” he said in a statement yesterday.

TNB rewarded shareholders with a RM1.26 billion interim dividend payout, which translates to a dividend per share of 22 sen.

For 1H21, TNB’s net profit rose to RM1.78 billion from RM1.37 billion in 1H20, while revenue hit RM23.92 billion compared to RM22.55 billion previously.

TNB announced its sustainability aspiration to achieve net zero emissions by 2050, in a bold move towards decarbonisation and renewable energy (RE).

This new pathway is a clearer manifestation of TNB’s sustainability journey, which began in 2016 with the launch of the Reimagining TNB strategic plan.

Under this drive, TNB has committed to reduce 35% of its emissions intensity, as well as 50% of its coal generation capacity by 2035.

In addition, TNB has pledged to ensure its revenue from coal generation plants does not exceed 25% of its total revenue.

The company had earlier this year committed to no longer investing in greenfield coal plants after Jimah East Power, which was commissioned in 2019, while existing plants will be phased out on expiry of their power purchase agreement.

“Leading up to the 2035 commitment, we will continue to improve efficiency at our existing thermal plants and build up scale in our renewable generation portfolio. Our target is to achieve 8,300MW of RE by 2025.

“We believe that an inflection point between 2035 and 2040 will determine the speed of our net zero trajectory,” Baharin added.

TNB is dedicated to developing energy storage solutions and is in discussions with the government to implement this as an enabler for RE growth.

The company intends to accelerate investments in emerging green technologies like green hydrogen, carbon capture and utilisation as soon as it becomes economically viable.

TNB remains committed to the government’s green agenda and Malaysia’s commitment to reduce greenhouse gas emission intensity of GDP by 45% by 2030, relative to the 2005 baseline.