TNB expects improved power demand in coming months

by ASILA JALIL / pic by TMR FILE

TENAGA Nasional Bhd (TNB) expects improved demand for power in the coming months in tandem with the national economic recovery that will allow for more economic activities to reopen for business. 

The group’s president and CEO Datuk Bahari Din stated that the power utility company recorded another period of resilient performance mainly on the back of improved economic activities. 

“However, we saw a contraction of 6.7% in our third quarter of 2021 (3Q21) electricity sales compared to the previous quarter due to the shifting dynamics caused by the ongoing pandemic. We continue to brace ourselves for prevailing uncertainties ahead,” he said in a press release yesterday. 

TNB’s net profit in 3Q21 slipped by 0.6% year-on-year (YoY) to RM1 billion while revenue increased 16.8% YoY to RM12.98 billion due to the Imbalance Cost Pass Through of an under-recovery position of RM1.31 billion compared to an over-recovery position of RM956.8 million. 

Operating expenses increased to RM10.82 billion in the period mainly due to higher generation cost, resulting in an increase in the operating profit of RM201.1 million or 10.8%. 

For the nine months of 2021 (9M21), its earnings rose 16.9% YoY to RM2.78 billion on the back of higher operating profit coupled with the increase in accounting gain on fair value of the financial instruments of RM87.5 million compared to a lower gain of RM60 million reported a year ago. 

Revenue for 9M21 increased 9.6% YoY to RM36.89 billion due to higher sales of electricity of RM3.13 billion, up by 9.5% from RM33.08 billion a year ago. 

The group noted that the prolonged Covid-19 pandemic had affected customers’ payment behaviour as longer outstanding debts became more challenging to recover. 

This led to a higher net loss on impairment of financial instruments of RM906.9 million in 9M21. 

“We see potential room for growth. As the custodian of the nation’s critical power infrastructures, maintaining reasonable returns is critical for TNB to balance value creation for our shareholders and reinvesting into the system to ensure reliable and secure power supply,” said Baharin. 

He added that the group’s sustainability pathway will lead to new growth opportunities, anchored on TNB’s aspiration of becoming a leading provider of sustainable energy solutions in the country and globally.